Stock Analysis

Caesars Entertainment, Inc. (NASDAQ:CZR) Just Released Its Third-Quarter Earnings: Here's What Analysts Think

NasdaqGS:CZR
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Caesars Entertainment, Inc. (NASDAQ:CZR) just released its quarterly report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.2% to hit US$2.9b. Statutory earnings per share (EPS) came in at US$0.24, some 2.2% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Caesars Entertainment

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NasdaqGS:CZR Earnings and Revenue Growth November 5th 2022

Taking into account the latest results, the consensus forecast from Caesars Entertainment's twelve analysts is for revenues of US$11.4b in 2023, which would reflect an okay 7.4% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Caesars Entertainment forecast to report a statutory profit of US$0.93 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.3b and earnings per share (EPS) of US$0.55 in 2023. Although the revenue estimates have not really changed, we can see there's been a very substantial lift in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

There's been no major changes to the consensus price target of US$70.21, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Caesars Entertainment at US$102 per share, while the most bearish prices it at US$27.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Caesars Entertainment's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2023 being well below the historical 45% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Caesars Entertainment is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Caesars Entertainment's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Caesars Entertainment going out to 2024, and you can see them free on our platform here..

You can also view our analysis of Caesars Entertainment's balance sheet, and whether we think Caesars Entertainment is carrying too much debt, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.