Texas Capital downgraded Caesars Entertainment to Hold following the announced acquisition by Fertitta Entertainment at $31 per share, citing limited upside.
The deal values Caesars at roughly 7x 2027 estimated EV/EBITDA, which Texas Capital believes undervalues the company's assets, including Las Vegas Strip properties and digital operations.
Analyst David Bain noted that while alternative bids for select assets are possible, a competing bid for the entire company is unlikely due to the $17.6 billion transaction size.
Texas Capital highlighted Caesars' improved fundamentals since the Eldorado merger but sees the buyout price as capping shareholder returns.
