Caesars Entertainment, Inc. (NASDAQ:CZR) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It was a pretty negative result overall, with revenues of US$2.7b missing analyst predictions by 3.1%. Worse, the business reported a statutory loss of US$0.73 per share, much larger than the analysts had forecast prior to the result. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following last week's earnings report, Caesars Entertainment's 15 analysts are forecasting 2024 revenues to be US$11.6b, approximately in line with the last 12 months. Statutory earnings per share are expected to crater 95% to US$0.17 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$11.7b and earnings per share (EPS) of US$1.31 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The average price target fell 5.8% to US$55.31, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Caesars Entertainment, with the most bullish analyst valuing it at US$73.00 and the most bearish at US$43.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Caesars Entertainment's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 34% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.8% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Caesars Entertainment.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Caesars Entertainment's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Caesars Entertainment. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Caesars Entertainment going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Caesars Entertainment (1 doesn't sit too well with us!) that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.