After a terrible performance last year, Caesars Entertainment (NASDAQ: CZR) stock has seen a slight recovery at the beginning of 2025, with significant support from Wall Street analysts praising the stock's positive attributes. 

Stifel's Steven Wieczynski is included in that cohort, informing clients in a recent note that the risk/reward in the gaming stock leans towards the upside and that the shares are appealingly priced. He recognizes that such characteristics might be sufficient for certain investors to consider Caesars due to concerns that this year’s comparisons on the Las Vegas Strip, where the company ranks as the second-largest operator, will be challenging to achieve, while market players worry about consumer health.

"However, we believe the setup for 2025 is overly attractive and believe the risk/reward at current trading levels is too compelling to pass up, thus we believe investors should be revisiting the CZR story,” observes the analyst. “2025 consensus estimates are set in a manageable/beatable position (and any kind of beat should be good enough right now).”

He considers Caesars a “buy” with a price target of $51, decreased from $54, suggesting a potential increase of nearly 50% from the current closing price. 

Caesars Stock Holds Potential for Growth 

In the initial innings of 2025, a distinct theme is becoming apparent from the sell side regarding Caesars stock: an increasing number of analysts are conjecturing that this might be the year when the operator enters into a deal concerning its digital unit to unlock value for shareholders. 

Wieczynski observes that management is becoming more receptive to finding methods to extract value from its internet operations, as the stock price fails to represent advancements in that area. Similar to certain competitors, Caesars Digital is perceived as a “diversion” from the operator’s primary physical casino operations, which may lead management to reconsider the interactive division's role within the company's overall framework. 

“We also believe certain CZR shareholders could start to ‘push’ management to try and unlock value for their Digital platform,” adds Wiecyznski. “Based on where shares are trading today, we believe any type of ‘event’ could drive a material amount of value back to existing CZR shareholders.”

The analyst recognized that currently, there’s no clear indication of how Caesars might separate from the online division, but should it proceed with a tax-free spinoff at 13x to 15x EBITDA, this could assess the unit’s worth at $17 to $23 per share. Divesting the digital segment in that manner would necessitate Caesars to keep at least 20%. 

Potential Issues for Caesars Stock Due to Regional Casinos 

Certain analysts hold the view that the challenge of difficult comparisons on the Las Vegas Strip is already reflected in Caesars' stock price, and that the most challenging comparisons are associated with the top-tier casino hotels. This suggests that Caesars might be relatively shielded from this trend because of its greater emphasis on mass market patrons. 

Should there be a risk to the stock in 2025, it may manifest as sluggishness at the operator’s regional casinos, although management is confident that this segment will experience growth this year. 

“We remain more concerned about regional gaming markets, but believe our revised estimates are properly accounting for a lackluster operating environment,” concludes Wieczynski.