Jefferies Equity Research has given a positive outlook on Caesars Entertainment, recommending a Buy rating for the company. The firm’s analyst, David Katz, sees significant potential in Caesars’ digital business and believes the recent executive changes could be a catalyst for growth.
This week, two executives from Icahn Enterprises were appointed to Caesars’ Board of Directors. Katz views this move as a promising development for the company’s stock, emphasizing that it strengthens the company’s leadership at a crucial time. “The announcement is a good sign for shares,” Katz stated in a note to investors. This shift in leadership comes at a time when Caesars is looking to further establish its footprint in the growing digital entertainment market.
The stock has been a subject of debate for investors over the past couple of years, with the primary question being how the company can best capture value from its current position. Despite the ongoing discussion, the stock is currently valued at 6.3X 2026 earnings EBITDA, which Katz believes signals potential for upside.
Digital Business Seen as Key Growth Driver
The analyst is particularly optimistic about the digital segment of Caesars Entertainment, which has been showing promise despite being in the early stages of development. Katz believes that as the digital business matures and its earnings power becomes more evident, it will contribute significantly to Caesars’ overall performance.
The company has been working to capitalize on the growing online gaming and sports betting markets, a sector that has been gaining momentum across the U.S. With several states legalizing online gambling, the potential for Caesars to expand its digital business is considerable.
What sets Caesars apart from its competitors in the digital space is its established brand in land-based casinos, which could serve as a strong foundation for its online operations. Caesars has been leveraging its brand recognition and existing customer base to drive digital growth.
Icahn Enterprises’ Influence on Caesars
The addition of two Icahn Enterprises executives to Caesars’ board is another factor that could help reshape the company’s direction. Icahn Enterprises, led by billionaire Carl Icahn, is known for its strategic involvement in companies it invests in. The executives joining Caesars’ board bring with them significant experience in corporate strategy, which could help the company enhance its digital initiatives.
With Icahn’s backing, Caesars is expected to take a more aggressive approach in expanding its digital business. Katz highlights this as a key element for investors to watch in the coming months.
In summary, Jefferies’ buy rating is based on the belief that Caesars’ digital business will drive growth and that the recent board changes could be a key factor in unlocking the company’s full potential. While the stock has been subject to market debates, Katz remains confident in Caesars’ long-term prospects.
