Caesars Entertainment's Recent Sell-off Regarding Cyber Attacks Generates Compelling Entry Point: Analyst Highlights Multiple Catalysts

Stifel analyst Steven M. Wieczynski reiterated a Buy rating on Caesars Entertainment, Inc. CZR, raising the price target to $80 from $74.

Wieczynski writes that the recent sell-off around the cyber-attacks has created an overly compelling entry point for CZR.

Shares of CZR, which are down ~17% (S&P down ~3%) since early September, are overdone and have now presented investors with a solid buying opportunity.

Also See: Casino Giants Face Cybersecurity Crisis: Caesars Entertainment Falls Prey To Hackers Post-MGM Attack

Wieczynski highlights multiple catalysts on the horizon that should drive shares higher: the F1 race in November, strong 2024 convention/group commentary on the 3Q23 call, Super Bowl in 1Q24, and labor deal resolution.

The analyst believes that the market continues to discount the long-term FCF potential of CZR's brick & mortar business and ability to delever this company. 

Wieczynski applauds the macro trends both in Vegas and in Regionals that remain healthy with little to no signs of weakening customer base (except in one-off markets with increased competition). 

The analyst thinks there is an upside to long-term estimates and sees a path to ~$5 billion in EBITDA. 

Also Read: Ransom Rebels! MGM Hackers Waited For Days Before Issuing Financial Demands: Report

The analyst adds that CZR believes the long-term impact around the cyber-attacks should be minimal, and operations have returned to normal. 

Regarding the potential union strike, management noted that talks with the unions continue to be constructive, and they hope that a resolution will be completed over the next month or so.

The analyst raised FY23E EPS to $4.12 from $3.98, with revenues of $11.56 billion.

Overall, the analyst believes CZR fits that profile, very similar to MGM Resorts International MGM, and doesn't believe their current share price/valuation are giving the company much credit for that potential long-term growth opportunity.

Price Action: CZR shares are trading higher by 2.53% to $46.92 on the last check Wednesday.