Published on 29 May 2024 on Zacks via Yahoo Finance
Here's Why You Should Retain Caesars Entertainment (CZR) Stock
Caesars Entertainment, Inc. CZR will likely benefit from improving occupancy, strategic partnerships and increased sports betting volumes. Also, the focus on property development and digitalization bodes well.However, increased expenses and competitive pressure are headwinds. Also, weather-related woes in the Regional segment are other concerns.Let us discuss the factors that highlight why investors should retain the stock for now.
Factors Likely to Drive Growth
Improving occupancy: The company continues to benefit from robust occupancy. During first-quarter 2024, occupancy in Las Vegas reached 97.6%, a new record. CZR saw record first-quarter occupancy thanks to strong visitation. The company experienced a 23% year-over-year increase in net gaming revenues in the OSB segment and a 54% year-over-year increase in net gaming revenues in the iCasino segment.Despite challenges, the Las Vegas segment delivered $440 million in adjusted EBITDAR. Operating results in the regional segment also showed sequential improvement each month during the quarter. The company is optimistic about the outlook for 2024 and beyond, with strong forward occupancy and ADRs. Also, prospects for group and convention remain encouraging.Strategic partnerships: Caesars Entertainment continues to focus on partnerships to drive growth. On Mar 7, 2024, the company renewed its United States partnership with the National Hockey League (NHL), retaining its status as a Sports Betting and Gaming Partner. This multiyear extension grants Caesars Digital access to NHL-owned intellectual property to develop NHL-branded iCasino games for its online platforms in North America, including the Caesars Palace Online Casino. The company also unveiled a partnership with renowned chef Rick Bayless to introduce his acclaimed restaurant Tortazo to two of its destinations.Sports Betting to Drive Growth: Strategic emphasis on expanding into sports betting is a positive development. In 2023, CZR focused on enhancing the sports betting experience with improvements in product and technology. The company is optimistic about its ability to enhance hold throughout 2024.During first-quarter 2024, online sports betting net revenues increased 23% year over year. The hold rate also increased by approximately 80 basis points year over year to 6.7%. The company stated benefits from increased state or jurisdictional legalization, new product launches and improved customer adoption. As of Mar 31, 2024, the company operated sports betting in 31 jurisdictions in North America, out of which 26 offer mobile sports betting.During the quarter, the company successfully launched mobile sports betting in North Carolina. Initial results are promising, with a faster customer sign-up rate compared with previous state launches. This led to a higher market share. CZR is focused on key priorities for the rest of the year.