Shares of Caesars Leisure (NASDAQ: CZR) are greater by 8.68% yr so far, and 13.14% over the previous 12 months. However CEO Tom Reeg apparently sees worth within the on line casino firm he helms.
Caesars CEO Tom Reeg in a 2021 CNBC interview. He purchased 7,500 shares of the corporate’s inventory earlier this month. (Picture: CNBC)
A latest Type 4 submitting with the Securities and Alternate Fee (SEC) confirms Reeg purchased 7,500 shares of Caesars inventory earlier this month. The acquisition occurred on June 14 at a median value of $49.93 for a complete transaction value of $370,725. The inventory closed at $45.21 on Friday after slumping 10% on the week.
That buy was made by means of a belief that now owns 17,500 shares of the Flamingo operator. Reeg owns one other 318,720 shares of his employer’s fairness in a private investing account.
Reeg grew to become chief government officer of the biggest home on line casino operator by variety of properties in July 2020, when Eldorado Resorts, the corporate he beforehand led, acquired the Harrah’s operator, creating “new Caesars.”
Reeg Has Caesars Trending in Proper Path
Reeg took the helm at Caesars throughout a tumultuous time. The coronavirus pandemic not solely stifled the gaming trade, however forged doubt on whether or not or not Eldorado and Caesars would make it to the merger altar.
For the reason that deal was sealed and Reeg took the lead on the new firm, Caesars’ inventory is greater by roughly 36%. It’s additionally a favourite amongst Wall Road analysts at a time when the operator’s Las Vegas Strip and regional casinos are performing admirably.
Traits each in Vegas and in Regionals for probably the most half stay wholesome and the corporate will not be seeing any materials indicators that their buyer base is weakening,” wrote Stifel analyst Steven Wieczynski in a observe on Caesars out earlier this month. “We consider present buying and selling ranges have already integrated a major slowdown in shopper tendencies.”
Wieczynski charges the inventory a “purchase” with a $68 value goal, implying upside of 51.9% from the June 23 shut.
Reeg Driving Deleveraging, iGaming Profitability
Among the many causes Wall Road is passionate about Reeg and the Caesars administration crew are debt discount efforts and Caesars Digital’s flirtation with profitability, which might arrive later this yr. That unit consists of web casinos and Caesars Sportsbook.
On the finish of the primary quarter, the gaming firm had $13.2 billion in debt. Whereas that’s one of many highest totals within the trade, it’s effectively beneath the tally seen when Eldorado acquired the corporate, and represented a pointy year-over-year enchancment. Impressively, the debt discount Caesars achieved in 2022 arrived with out the good thing about an asset sale. Analysts and the corporate itself consider one other $1 billion-plus in liabilities might be eradicated this yr, additionally with out the help of promoting a gaming venue.
It’s attainable that by 2025, Caesars can have pushed leverage right down to the 3x vary whereas producing $5 billion in earnings earlier than curiosity, taxes, depreciation, and amortization (EBITDA). As Wieczynski notes, that would indicate a per-share free money stream of $12.
