Analysts are warning investors not to anticipate much from Caesars Entertainment's (NASDAQ: CZR) second-quarter results, which are released after US markets close on Tuesday, July 29.

Daniel Politzer of J.P. Morgan is included in that group.  Caesars' Las Vegas earnings before interest, taxes, depreciation, amortization, and restructuring or rent expenses (EBITDAR) for the second and third quarters may fall short of projections, the analyst writes in a recent report to clients.  For the June quarter, he expects the gambling company to generate Las Vegas EBITDAR of $479 million, which is just below than the $482 million Wall Street average.

Politzer reduced his EBITDAR prediction for the Flamingo operator from $459 million to $430 million for the current quarter.  These actions align with the increasingly pessimistic outlook regarding tourism and gross gaming revenue (GGR) on the Las Vegas Strip.  Given that Caesars is the second-largest Strip operator, investors are quite interested in the negative aspects of Sin City.

According to generally accepted accounting standards (GAAP), experts anticipate that the operator of Harrah's will post earnings per share of five cents for the June quarter.  According to Seeking Alpha statistics, nine analysts have lowered their initial expectations of $2.86 billion in revenue over the last ninety days.

The Longer-Ranging Vegas Views at Caesars Are Important

Investors have factored in a lackluster second-quarter performance for casino operators due to the ongoing trade disaster with Canada and Mexico, as well as consumers' growing perception that Las Vegas is providing less value.  Given that the stock has increased 5% in the last month and 12% in the last ninety days, Caesars has, if anything, been given some leeway.

Investors may need to be patient with shares of operators exposed to Las Vegas if that momentum is to continue, and the companies must provide market participants with an incentive to do so.

"For Las Vegas, the forward outlook will be in focus, especially for the third quarter where trends appear weak as well as the fourth quarter and first half of 2026 where group/convention business could drive growth,” observes Politzer.

He continues by saying that Caesars has a remarkable free cash flow and that the stock is cheap.  The analyst has set a price objective of $48 for the name, which indicates a 60% increase from its current trading level.

“We like Caesars for its material net free cash flow generation (50%+ of market cap) through 2027, which should accrete to shareholders via debt reduction and/or capital returns; heavily discounted valuation – even ascribing zero value to Caesar’s OpCo assets, we arrive at a fair value in the mid-$40s,” according to the analyst.

Regional Casinos May Be Able to Take Over

Caesars boasts one of the biggest portfolios of regional casinos, demonstrating how important its non-Las Vegas establishments are to the overall investment strategy.  The temporary problems at Caesars' regional sites in Atlantic City, Lake Tahoe, and Louisiana caused Politzer to reduce his second-quarter EBITDAR projection from $463 million to $448 million.

The J.P. Morgan analyst predicts that consumer health, profitability, and the frequency of promotional spending intended to increase foot traffic would likely be topics of discussion during Caesars' next earnings call.