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Caesars Entertainment Inc CZR

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Morningstar’s Analysis

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Caesars Seeing Robust Demand Improvement and Stout Profitability; Shares Undervalued

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

No-moat Caesars saw strong demand and profitability improvement across both its Las Vegas and regional markets in its second quarter that is likely to lead to around a high-single-digit percentage increase to our $98 fair value estimate, leaving shares undervalued, even post the 5% move higher in shares in after hours.

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Company Profile

Business Description

Caesars Entertainment Includes around 50 domestic gaming properties across Las Vegas (40% of 2021 estimated EBITDAR before corporate and digital expenses) and regional (60%) markets. Additionally, the company hosts international properties, which generate near break-even to slightly positive EBITDAR. Caesars' U.S. presence roughly doubled with the 2020 acquisition by Eldorado, which built its first casino in Reno, Nevada, in 1973 and expanded its presence through prior acquisitions to over 20 properties before merging with legacy Caesars. Caesars' brands include Caesars, Harrah's, Tropicana, Bally's, Isle, and Flamingo. Also, the company owns William Hill, a digital sports betting platform.

100 West Liberty Street, 12th Floor
Reno, NV, 89501
T +1 775 328-0100
Sector Consumer Cyclical
Industry Resorts & Casinos
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 54,000