Caesar's earnings predictions for Q2 likely to fall short, predicts financial expert
Caesars Entertainment (CZR) is bracing for a potential miss in its Q2 earnings estimates, as analysts express concerns about the company's performance, particularly in terms of EBITDAR. The sluggish conditions on the Las Vegas Strip, a significant market for Caesars, are a major factor in these expectations.
## Q2 Expectations
Analysts, such as J.P. Morgan's Daniel Politzer, have lowered their EBITDAR forecasts for Las Vegas. Politzer expects Q2 EBITDAR to be $479 million, slightly below the consensus estimate of $482 million. Earnings per share (EPS) are anticipated to range from $0.05 to $0.10, marking an improvement from the loss of $0.56 per share in the year-ago quarter. The company's revenue for the second quarter is forecast to be $2.86 billion.
## Temporary Challenges Affecting Regional Venues
Politzer has also lowered his second-quarter EBITDAR forecast for Caesars' regional venues to $448 million, a decrease from $463 million, due to temporary issues at properties in Atlantic City, Lake Tahoe, and Louisiana. These issues are specific to these locations.
## Q3 Outlook
For the third quarter, Politzer has further reduced his EBITDAR forecast to $430 million, reflecting ongoing challenges in Las Vegas. Analysts generally expect Q3 to be challenging, with sentiment remaining gloomy due to weak Las Vegas Strip gross gaming revenue (GGR) and visitation data.
## Caesars' Broader Investment Thesis
Caesars Entertainment has a large portfolio of regional casinos, which play a significant role in the broader investment thesis. On Caesars Entertainment's upcoming earnings call, points of interest regarding the regional portfolio are likely to include consumer health, margins, and the cadence of promotional spending aimed at generating more foot traffic.
Despite these challenges, Politzer's favorable view of Caesars Entertainment is based on its potential for material net free cash flow generation through 2027, which could accrue to shareholders via debt reduction and/or capital returns. J.P. Morgan's analyst, Daniel Politzer, has a $48 price target on Caesars Entertainment, implying an upside of 60% from its current trading price.
Even when assigning no value to Caesars' OpCo assets, the analyst arrives at a fair value for the company in the mid-$40s. The forward outlook for Las Vegas, particularly the third quarter and fourth quarter of 2025 and the first half of 2026, is a focus due to perceived weakness.
Caesars Entertainment is the second-largest operator on the Las Vegas Strip. The company is expected to release its second-quarter results on July 29, 2025.
- Acknowledging the concerns of analysts like Daniel Politzer, Caesars Entertainment's Q2 EBITDAR could come slightly below the consensus estimate, owing to sluggish conditions on the Las Vegas Strip.
- In addition to Las Vegas, temporary issues at regional venues in Atlantic City, Lake Tahoe, and Louisiana have led Politzer to lower his EBITDAR forecast for Caesars' regional venues for Q2.
- Despite the challenges faced in Q2, analysts generally anticipate a difficult Q3, with weak Las Vegas Strip GGR and visitation data contributing to the gloomy sentiment.
- The broader investment thesis for Caesars Entertainment revolves around its large portfolio of regional casinos, with the upcoming earnings call likely to address consumer health, margins, and promotional spending on these properties.
- J.P. Morgan's Daniel Politzer expects potential material net free cash flow generation from Caesars Entertainment through 2027, which could benefit shareholders through debt reduction and capital returns. His favorable view is backed by a $48 price target, implying a 60% upside from the current trading price.
