Caesars
Resort and casino operator Caesars Entertainment Inc. (NASDAQ: CZR) has seen its share price drop by almost 33% over the past 12 months. From a 52-week low in early October, the share price has gained 32.6%. The company, which last year considered selling its legendary Flamingo property, has now launched a plan to revamp its Las Vegas properties by remodeling Bally’s and renaming it Horseshoe and renovating the entryway to Caesars Palace. While more than just cosmetic changes, the company’s planning may need to get bolder.
Sentiment remains solidly bullish on the stock, with 12 of 15 analysts having a Buy or Strong Buy rating and two more rating the stock at Hold. At a share price of around $45.30, the upside potential based on a median price target of $70.00 is 54.5%. At the high price target of $111.00, the upside potential is 145%.
The consensus first-quarter revenue estimate is $2.76 billion, down 2.2% sequentially but up 20.5% year over year. Caesars is forecast to post EPS of $0.06, compared to a loss per share of $0.22 sequentially and a loss of $1.98 per share in the year-ago quarter. For the full year, analysts are expecting EPS of $1.02, much better than last year’s loss per share of $3.64, on sales of $11.527 billion, up 6.4%.
Caesars shares trade at 44.6 times estimated 2023 earnings, 18.5 times estimated 2024 earnings of $2.45 and 32.1 times estimated 2025 earnings of $1.41 per share. The stock’s 52-week range is $31.31 to $70.23. The company does not pay a dividend, and total shareholder return for the past year was negative 32.79%.
Energy Transfer
Natural gas pipeline and infrastructure company Energy Transfer LP (NYSE: ET) has added 13% to its share price over the past 12 months. For the year to date, the common units are up 8.5%.
Like many pipeline operators, Energy Transfer is a master limited partnership (MLP) that pays a generous distribution to unitholders and is mostly shielded from commodity price movements because the bulk of the company’s capacity is contracted. The company raised its quarterly dividend in January, returning the payout to its pre-pandemic level and pushing its dividend yield above 9%. In the December quarter, Energy Transfer distributed $944 million to unitholders, nearly double the prior year’s distribution.
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