Citizens has trimmed its price target on Caesars Entertainment Inc. shares to $34 from $37 but kept a Market Outperform rating, reflecting a view that the stock still has meaningful upside from current levels. With the share price trading around $18.95, near the 52-week low of $17.86, the firm notes the company faces a difficult near-term demand environment.
Data show the stock has declined by more than 52% over the last year, though Citizens regards the name as appearing undervalued against Fair Value estimates. The analyst update highlights continued weakness among Caesars’ lower-end customer cohort, consistent with broader commentary from other operators. That softness has manifested in a muted booking window and weaker mid-week visitation, factors the firm says have pressured margins and profitability.
Operationally, Caesars reported a negative earnings per share of -$1.15 on a trailing-twelve-month basis, underscoring the profitability challenges the company is facing. Citizens’ modeling assumes no material recovery in lower-end demand in the near term, and it projects first-half 2026 EBITDAR to be down about 3% versus the prior expectation. The firm expects conditions to improve in the second half of 2026 as Caesars laps comparisons to last summer’s deceleration.
Regional operations were a particular drag in the most recent quarter. Citizens says regional properties performed slightly below expectations, with adverse weather in the back half of December contributing to a decline in EBITDAR and producing a quarterly result about 1% below consensus. To reflect weather-driven weakness across the U.S. in January, the firm lowered its first-quarter 2026 regional estimates while noting that tax refund timing could act as an offsetting catalyst later in the quarter.
Despite these near-term headwinds, Citizens characterizes the quarter overall as in line with expectations and remains constructive on Caesars’ 2026 outlook. The firm’s stance - maintaining an outperform rating while trimming the price target - signals a view that valuation still offers upside if visitation trends normalize.
Caesars’ reported fourth-quarter results underlined the mixed nature of the company’s performance. The company posted a loss of $1.23 per share for the quarter, which was substantially wider than the -$0.12 per share analysts had expected. Revenue totaled $2.92 billion, modestly above the $2.9 billion consensus, and same-store revenue rose 4.4% year-over-year. The company’s digital betting division delivered a record quarter and was a clear bright spot in the results, contributing positively to overall revenue and demonstrating progress in the company’s digital strategy.
The juxtaposition of stronger digital performance and broader weakness in lower-end visitation creates a mixed earnings picture: revenue growth on a same-store basis and record digital results on one hand, and wider-than-expected per-share losses and regional pressures on the other. Citizens’ projection of a softer first half of 2026 followed by relative improvement in the back half reflects that duality.
Summary
Citizens cut its Caesars price target to $34 from $37 while leaving a Market Outperform rating unchanged. The analyst cited sustained softness in lower-end customer demand and weaker mid-week visitation, projecting a modest decline in first-half 2026 EBITDAR and expecting a more favorable second half as comps ease. Caesars posted mixed fourth-quarter results, with a wider-than-expected loss of $1.23 per share, revenue of $2.92 billion, 4.4% same-store growth, and a record quarter for its digital betting segment.
Key points
- Price target reduced to $34 from $37; Market Outperform rating maintained - sector impact: consumer discretionary, gaming.
- Persistent softness in lower-end customer segment and weaker mid-week visitation drove the downgrade to near-term EBITDAR - sector impact: regional casinos and leisure demand.
- Q4 showed mixed results: wider-than-expected loss (-$1.23 vs -$0.12 expected), revenue modestly above consensus at $2.92 billion, and 4.4% same-store growth with digital betting hitting a record quarter - market impact: digital gaming and recurring revenue streams.
Risks and uncertainties
- Uncertain timing of recovery in lower-end demand could prolong margin pressure - impacts gaming operators and regional leisure markets.
- Near-term weather-related disruptions and other geographic factors may continue to depress regional EBITDAR - impacts regional properties and local economies.
- Continuing wide per-share losses could weigh on investor sentiment even if digital revenue grows - impacts equity valuation and capital allocation decisions.