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Posted on: January 15, 2026, 11:13h.
Last updated on: January 15, 2026, 11:13h.
- The downtrodden stock is showing signs of life.
- Analyst says lower-end Las Vegas leisure trends are stabilizing.
- Interest rate cuts could boost the shares.
Following a dismal showing in 2025, Caesars Entertainment (NASDAQ: CZR) stock is up 6% to start 2026 and even with that rally, the valuation remains depressed relative to historical norms.
That’s according to Texas Capital analyst David Bain who in a new report rates the Harrah’s operator a “buy” with $59 price target, implying the stock can more than double from current levels. Amid signs of stability on the Las Vegas Strip, where Caesars is the second-largest operator, Bain says Caesars’ earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (EBITDAR) should grow approximately 6% this year.
We continue to model Las Vegas year-over-year growth beginning in 2Q26E with sustained year-over-year improvements throughout the year,” observes Bain. “We believe CZR’s historic low valuation augments in 2026 driven by LV growth, continued regional stability/growth, significant digital growth and a lower interest rate environment.”
He made no adjustments to the company’s fourth-quarter Las Vegas estimates. Caesars is scheduled to deliver those results on Feb. 17.
Caesars Stock Could Get a Las Vegas Lift
Last year, Las Vegas visitation was pinched by a variety of macroeconomic factors, including Canadians responding to US trade tariffs and high unemployment in neighboring California, but there’s belief on Wall Street 2026 will be kinder to Strip operators.
Bain notes a strong convention calendar could bolster various Caesars Strip properties with tax perks from the One Big Beautiful Bill Act (OBBA) going into effect this year potentially providing some ballast to Caesars Las Vegas and regional casinos as well as its digital unit.
The analyst adds there’s still “softness” among “lower-end” leisure customers in Las Vegas, but those trends are stabilizing. That’s material to both Caesars and MGM because many cost-conscious consumers are feeling priced out of Las Vegas, but are eager to return if gaming companies enhance their value propositions.
On the digital side of the business, Bain pared his fourth-quarter earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate to $70 million from $84 million to account for October hold disruption, but he also mentioned Caesars as a potential beneficiary of Maine’s recent surprise decision to approve iGaming.
More Rate Cuts Would Help Caesars Stock
Carrying one of the industry’s biggest debt burdens, Caesars is tethered to monetary easing by the Federal Reserve with Bain noting for every 100 basis points rates decline, the gaming company saves an estimated $60 million in annual interest expenses. However, an unprecedented criminal investigation by the Justice Department into Fed Chair Jerome Powell could call into question the central bank’s rate cut plans for the coming months.
The positive news for Caesars investors is that on the basis of an estimated 2026 free cash flow (FCF) yield of 22%, the stock is undeniably cheap.
“At an 11% FCF yield shares would trade for $50, over double yesterday’s closing price. At 7.5x EV/EBITDA, still over 1.5x below its historical average, CZR would trade for $40 a share, ~60% higher than yesterday’s closing price,” concludes Bain.
