Caesars Stock Could Be Super in September

Posted on: September 5, 2022, 04:00h. 

Last updated on: September 6, 2022, 03:56h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

On a historical basis, September is the worst month of the year for the S&P 500. But some members of the widely followed equity gauge often thrive in the ninth month of the year. That group includes Caesars Entertainment (NASDAQ:CZR).

Caesars stock
Caesars Entertainment’s Harrah’s New Orleans. The stock is known for strong September showings. (Image: The Advocate)

While the S&P 500 averaged a September decline of 0.6% over the past 20 years, Caesars stock posted an average return of 5.69% this month over the past decade, finishing September to the upside 75% of the time, according to Schaeffer’s Investment Research.

That’s easily good enough to put the Harrah’s operator among the top 25 S&P 500 components, based on average returns, over the past 10 Septembers. Caesars is the only casino stock on the list. But it is one of seven travel and leisure equities with track records of solid performance in the ninth month of the year.

Historical trends in financial markets can be instructive, but they aren’t guaranteed to repeat yearly. Some analysts believe still-high inflation and a slowing economy could weigh consumer discretionary spending into year-end. That would be a drag on gaming equities of all stripes.

Caesars Stock Might Get Football Lift

The 2022 football season kicked off in earnest this weekend with the start of college football. With the NFL starting on Sept. 8, this is prime time for sportsbook operators to boost revenue and profits.

Caesars Sportsbook is one of the big names in the industry that’s closing in on profitability. The operator is also adding to its brick-and-mortar and online footprints with the launch of internet betting in Kansas and two new retail sportsbooks in Louisiana.

Harrah’s New Orleans and Horseshoe Bossier City Hotel & Casino each made history by opening state-of-the-art Caesars Sportsbook locations at their resorts. In addition, Harrah’s debuted the largest poker room in Louisiana with its grand opening of the new World Series of Poker Room,” according to a Caesars press release.

The Harrah’s sportsbook is part of broader $325 million enhancements at the only casino in New Orleans, an addition which is expected to be completed in 2024. The venue will eventually take the Caesars Palace name.

Caesars Love for Louisiana

Already the dominant commercial casino operator in Louisiana, Caesars’ ongoing commitment to the state makes sense. That’s because it’s one of the largest gaming markets in the US and home to a burgeoning sports wagering scene.

Louisiana is a competitive and deep sports wagering market that rapidly climbed the ranks in terms of handle and revenue following legalization. And that was without the benefit of the 2021 football season.

“Caesars remains committed to investing hundreds of millions of dollars to provide unequaled sports and entertainment experiences throughout Louisiana. This commitment will see Isle of Capri Lake Charles transform into Horseshoe Lake Charles, which will reopen with a new Caesars Sportsbook location in the coming months,” according to the company.