Although sluggish returns on its land-based operations were mildly disappointing, Caesars’ digital operations surpassed expectations, leaving Wall Street analysts optimistic about its future growth.
Digital Star
Caesars’ second quarter earnings were released earlier this week, and traction in the digital market with online casino and mobile sports betting revenues made Wall Street sit up and take notice. The news did not significantly impact the stock price, which currently stands at $27.52, but the lackluster in-person gaming numbers could potentially contribute to this.
Nevertheless, the consensus is that analysts have not altered their projections on the stock, as Caesars remains a buy, and the stock is viewed as undervalued. Although some analysts point to the sluggish retail production and Caesars’ debt, there is plenty of optimism to go around.
Steven Wieczynski of Stifel remains bullish on Caesars, stating that Caesars, at the current price, is “too compelling to pass up” and that the outlook remains bright.
“We believe the setup for 2H25/2026 is overly attractive and believe the risk/reward at current trading levels is too compelling to pass up; thus, we believe investors should be revisiting the CZR story,” Wieczynski said. His target price for the stock increased to $45/share as he also raised EBITDA estimates for future years at approximately 4% of the current value.
Caesars’ Spin-Off
Rumors have circulated that Caesars may spin off its digital component into its own business. However, that may be premature at this point. Caesars’ CEO Tom Reeg agreed that the digital sector is closing in on hitting $500 million or more in annual digital EBITDA.
“… we’ll take a look at what we think of value at that point, whether we’re getting it reflected, but we would absolutely pursue a separation if we believe that it would drive significant value to our shareholders, and we think we’ll be in a position where we’re at our targets at some point in the first half of ’26,” Reeg said.
Reeg has long been a believer in Caesar’s digital, but only now is he getting supported by the financial community.
“I’ve taken so much grief over the $500 million target that we’re right on the precipice of, I’m hesitant to immediately put another target out there,” Reeg said. “But I’d say we’re going to generate substantially more than $500 million of EBITDA from Digital, if you’re looking out a few years here.”
Caesars launched its digital wallet in Nevada, with iGaming markets including Michigan, New Jersey, and Pennsylvania soon to follow by the end of Q1 2026.
