What Happened?
Shares of hotel and casino entertainment company Caesars Entertainment (NASDAQ: CZR) fell 3.3% in the afternoon session after Morgan Stanley lowered its price target on the company's stock to $27 from $29.
The analyst, Stephen Grambling, kept an "Equal-Weight" rating on the shares, but the reduced target suggested less optimism about the stock's future price. This adjustment contributed to negative investor sentiment, adding to a challenging period for the company. Shareholders had already seen the stock's value decline by more than two-thirds over the previous five years.
The shares closed the day at $24.36, down 3.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Caesars Entertainment? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Caesars Entertainment’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 2 months ago when the stock gained 7.1% on the news that comments from a key Federal Reserve official bolstered hopes for an interest rate cut.
New York Federal Reserve President John Williams stated he sees “room for a further adjustment” in the near term, sparking a significant market rally. Following his remarks, the probability of the central bank cutting rates at its December meeting jumped from 39% to over 73%, according to the CME FedWatch tool. This positive sentiment provided relief to markets amid concerns over high valuations, particularly in AI-related stocks.
Caesars Entertainment is up 3.2% since the beginning of the year, but at $24.31 per share, it is still trading 38.9% below its 52-week high of $39.76 from February 2025. Investors who bought $1,000 worth of Caesars Entertainment’s shares 5 years ago would now be looking at an investment worth $301.29.
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