Caesars Entertainment (NASDAQ: CZR) faced a 2.48% stock decline on 2025's first trading day after CFRA Research reiterated its "sell" rating and reduced the price target from $35 to $27, suggesting a 17.1% potential downside from the current $32.59 closing price.

CFRA analyst Zachary Warring maintains 2024 and 2025 earnings per share estimates at -$0.05 and $0.75, respectively. The analysis highlights concerns about Caesars' over-leveraged balance sheet and challenging year-over-year comparisons ahead.

Despite being the largest domestic gaming company by property count, including the recent Caesars Virginia opening in Danville, the company's debt burden remains problematic. The trailing-12-month EBIT/interest expense ratio stands at 1.0x, suggesting potential need for additional asset sales.

In 2024, Caesars reduced debt through strategic sales:

• World Series of Poker (WSOP) to NSUS Group Inc. for $500 million
• LINQ Promenade to TPG Real Estate and Acadia Realty Trust for $275 million

Industry analysts speculate about potential digital operations spinoff to further reduce debt, though Caesars hasn't confirmed such plans. The company's next quarterly results are scheduled for February 25, 2025, after market close.

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