- The operator’s Las Vegas casino revenue was essentially flat year over year
- Weak leisure demand in Sin City pushed Caesars to wider-than-expected losses
- Management expects better Q4, 2026
Shares of Caesars Entertainment (NASDAQ: CZR) are getting walloped on Wednesday after the casino giant reported a wider-than-expected third-quarter loss on softness in Las Vegas.
In midday trading, the already beleaguered stock is off almost 10% on volume that’s already surpassed the daily average following the downbeat earnings report delivered Tuesday after the close of US markets. Caesars’ stock is in danger of closing below $20 for the first time in five and a half years, or when its casinos were closed due to the coronavirus pandemic.
Investors are taking Caesars to task because the second-largest operator on the Strip posted revenue of $2.87 billion there for the July through September — remaining essentially flat year over year. A case can be made that market participants are treating Caesars’ stock too harshly today because it was widely known that, after a disappointing second quarter for Strip operators, more of the same was in store for the September quarter.
Investors could be in for another set of dour Las Vegas casino results on Wednesday when MGM Resorts International (NYSE: MGM) reports third-quarter results after the bell. MGM and Caesars are the two largest Strip operators.
Q3 Was Hard on Caesars, Q4, 2026 Could Be Better
On a conference call with analysts, Caesars CEO Tom Reeg dove into some details regarding the rough third quarter, including a 6% decline in average daily room rates and a 5% slump in average occupancy. Against that backdrop, the 2% drop in slot handle was tolerable, but overall Las Vegas casino hold dipped 600 basis points.
Reeg signaled some optimism, however, around group and convention business for the current quarter – a trend that’s expected to prove durable over the course of next year. Reeg told analysts that 2025 should be a record year for Caesars in terms of driving convention and meeting business in Las Vegas, adding that those highs will be toppled next year.
There [has] been softness in leisure demand for Las Vegas in the summer months, particularly in properties that I would view as priced takers, those that are as you go down the customer spectrum or you move out from the center of the strip, demand for those were soft,” he said on the call. “Premium has held up better, but it’s the return of group business in the fourth quarter and first quarter that allows rate compression that brings us back to a much healthier looking market as we look at this quarter and into 2026.”
Reeg also said the company likes what it’s seeing at its regional casinos. Revenue in that segment jumped 6.2% year over year, and there’s optimism around contributions from the operator’s Danville, Va., and New Orleans properties. Management also allayed concerns that it will engage in promotional battles to lure customers to its regional casinos.
Analysts Still Like Caesars’ Stock
Although the shares have shed nearly 41% of their value this year, Caesars’ stock still has supporters on the sell side, with some of the positivity rooted in the operator’s ongoing debt reduction efforts, though it’s likely to miss its 2025 goal in that regard.
The company has paid down ~$370 million of debt YTD, which we expect will fall short of the ~$1 billion a year mark with share repurchases now part of the capital return program,” observes Citizens Equity Research analyst Jordan Bender. “The pace of buybacks and debt reduction should accelerate (split evenly) over the coming quarters as capex should decline starting in 2026 and online continues to ramp cash flow.”
Bender rates Caesars’ stock “market outperform” with a $37 price target, noting the company could “meaningfully ramp free cash flow” next year.
The post Caesars Stock Sapped by Weak Q3 Las Vegas Casino Results appeared first on Casino.org.
