Caesars Entertainment, a prominent player in the world of casinos, outdid consensus predictions with a stellar performance in the third quarter. The big news was the remarkable turnaround of its Caesars Digital division, which went from a $38 million loss a year ago to a $2 million profit in the EBITA (earnings before interest, taxes, depreciation, and amortization).
This transformation was propelled by record-breaking adjusted EBITA of $1.04 billion, a marked increase from $1.01 billion during the same period last year. As a result, Caesars Entertainment has successfully chipped away at its outstanding liabilities, decreasing its debt from $13.08 billion at the end of 2022 to $12.45 billion as of September 30. Investors who have been wary of Caesars’ financial stability will certainly be heartened by these developments.
Over the next five years (2023-2027), the company plans to use its estimated $7.2 billion free cash flow and $3.2 billion in liquid cash and available credit to curb levels of debt and venture more into digital sports and iGaming markets. Despite no urgent debt maturities until 2025, when $4.3 billion of corporate debt is due, Caesars is projected to embark on modest stock buybacks next year. However, dividends aren’t expected until 2026, making Caesars the lone contender among the four largest US-listed casino stocks that doesn’t pay a dividend.
Entering 2023, Caesars was one of Wall Street’s favored gaming stocks. However, the stock underperformed this year, losing 5%. Although analysts remain bullish on the casino leader, at least half a dozen reduced their price targets after the third-quarter earnings report.
Looking ahead, the indicators for a recovery are in place with several exciting ventures on the horizon. The upcoming Formula One’s (F1) Las Vegas Grand Prix appears promising, with anticipated credit spending during the event expected to match or surpass New Year’s Eve’s spending. It’s a similar prospect for next February’s Super Bowl, an event that Las Vegas is gearing up to host. On a more localized level, the revamping of Caesars Palace New Orleans and the construction of new casinos in Columbus, Nebraska, and Danville, Virginia, bolsters the anticipations for a significant rebound.
In conclusion, the future of Caesars Entertainment seems promising, but in the gambling world, there’s a virtual counterpart keeping pace with the strides made in the physical world – online casinos. As we explore the digital landscape of gaming, visit us at West Island Blog where we share our top picks for online casinos](https://www.westislandblog.com/online-casinos/), all carefully vetted and reviewed to provide you with the best in the Canadian market.
