Morningstar Rating

Stock Research and Analysis

by Chad Mollman

Bulls Say

Passage of legalized online gambling at the state and federal level has the potential to lead to a significant increase in revenue for the company's online division.
A significant improvement in U.S. economic conditions would offer the potential for Caesars to increase revenue and free cash flow to a level where it can deleverage, leading to a meaningful bump in the share price.
The Las Vegas Strip is enjoying a modest recovery and the supply of hotel rooms and gaming positions has stabilized, positioning the company to increase room rates and revenue per gaming position. Read more 

Bears Say

The company faces intensifying competition in five of its six geographic markets, a structural headwind to same-location sales growth.
The excessively leveraged balance sheet is not sustainable, and there is the risk that in a recession the company defaults on its debt.
Because of its significant debt obligations, the company has been investing less than competitors in its casinos, which may lead to its properties becoming outdated. Read more 

Management

Gary Loveman is chairman and CEO, positions he has held since the mid-2000s. We would prefer the roles be split between two people because we believe this would foster greater board independence. Loveman was paid a base salary of $1.9 million and total   Read more 

Profile

Caesars Entertainment is the largest casino company in the United States, as measured by U.S. gaming revenue. As of December 2012, the company operated or managed 52 casinos   Read more 

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