Add Caesars to the list of sportsbooks hurt by betting results in September, according to Stifel analysts.
Stifel cut its Caesars Digital EBITDA estimate by 54.6% to $32.4 million for the third quarter, in a post-G2E management meeting note from Steve Wieczynski sent Wednesday.
That suggests a nearly $39 million impact from unfavorable sports betting results last month when compared to his post-Q2 estimate.
Wieczynski lowered his price target to $43 from $45 but maintained his buy rating, calling current levels a “compelling buying opportunity.” The stock closed at $24.65 on Tuesday.
Caesars sees strength in betting stats
While the note mostly focused on trends in Las Vegas and regional casinos, Wieczynski said Caesars is “seeing strength” across key performance indicators including bet size, parlay mix and volume.
Caesars reported parlay mix grew 2.8 percentage points in the second quarter compared to the prior year. Third quarter results will be released Oct. 28.
Along with strong volume, Caesars said it has seen “no competitive pressures” from prediction markets as sports predictions volume continues to hit new records.
Kalshi recently took a significant step forward with the addition of same-game parlays while Polymarket, which is getting up to $2 billion in investments from the owner of the New York Stock Exchange, prepares for its US return.
Digital spinoff still possible
Wieczynski said Caesars could still look to monetize its Digital business through a spinoff.
The company has repeatedly said the value of the Digital business is not reflected in the stock price yet and also has $11.3 billion in net debt as of June 30 on the balance sheet.
Caesars CEO Tom Reeg said any transactions involving Digital would have to come after the segment hits a run rate of $500 million EBITDA on the second quarter call:
“… we’ll take a look at what we think of value at that point, whether we’re getting it reflected, but we would absolutely pursue a separation if we believe that it would drive significant value to our shareholders, and we think we’ll be in position where we’re at our targets at some point in the first half of ’26.”
