Caesars Loyalty and Ongoing Investment Not Enough to Warrant a Moat; Shares a Touch Undervalued
We are initiating coverage of Caesars Entertainment with a no-moat rating and fair value estimate of $10.30. Trading just above 10 times 2019 enterprise value/EBITDA we see shares slightly undervalued. For those seeking gaming exposure, no-moat MGM trades at a wider margin of safety to our $38 valuation.We think Caesars' Entertainment will sustain its competitive positioning in the lower-growth lower-barrier Las Vegas (57% of estimated 2019 EBITDAR) and other U.S. regions (45%). (Caesars' manag...
MGM Resorts International is a holding company. Through its subsidiaries, the company owns and operates casino, hotel, and entertainment resorts across the United States and in Macau. The company's segments include: Las Vegas Strip Resorts, which consists of casino resorts such as Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, New York-New York, Excalibur, and Park MGM; Regional Operations, which consists of casino resorts such as MGM Grand Detroit, Beau Rivage, Gold Strike Tunica, Borgata, MGM National Harbor, MGM Springfield, Empire City, and MGM Northfield Park; and MGM China, which owns and operates casino resorts and the related gaming subconcession and land concessions.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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