Analyst Pegs Eldorado Shares At 3-Digit Potential

By Ben Hamill - July 03 2020
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Analyst Pegs Eldorado Shares At 3-Digit Potential

Eldorado Resorts, the soon-to-be new owner/operator of Caesars Palace, remains a 3-digit promise on the stock market. Shares of Eldorado last week traded at least 10 percent higher (at times showing an even better improvement) on NASDAQ (ERI) than what it did only weeks ago. And even though it’s a hike partially instigated by Stifel analyst Steven Wieczynksi’s stock fortune telling, which has Eldorado heading toward the $100 dollar-a-share mark, there does appear to be more to Eldorado than what it has received credit for up until now.

Referring to Stifel’s “bullish” point of view regarding Eldorado’s slow but steady approach toward the $100-club, Wieczynski yet again reiterated the gaming company being more than worthy of a “buy” rating, and boosted his forecast from $42 all the way up to $60 for the likely price of a future share.

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Still Won’t Be Easy

The analyst does however acknowledge the expectation that the gaming company’s rise into the $100-league probably won’t be the smoothest or even easiest of rides ever experienced. But since the Federal Trade Commission at long last two weeks ago officially signed off on Eldorado takeover of Caesars Entertainment, there appears to be much to look forward to over the course of the coming months – global crisis or no global crisis.

What stands out as promising for Stifel appears to be that of a new management structure and alliance energy with Caesars (CZR) on the stock market. A flow of newly freed up cash in the hands of two giants combined won’t hurt Eldorado’s ascent to the top of the value ladder either.

And even though joining the $100-dollar club will require Eldorado jumping hoops to the tune of a 150 per cent hike, Wieczynski reckons it’s not only possible, but glaringly obvious a forward projection.

Banking On Past Successes

While the analyst’s declared price target may be a great deal more optimistic that the general market consensus forecast of $47.10, takeover-induced cost savings is hard to beat when helping buy-ins and showcasing possible trade-offs. At the very least, it sure beats cost-cutting initiatives known to disrupt future income potential and often displacing employees. Value gained by pooling resources is generally considered a much more market-stabilising way of going about easing up on expenses and creating additional share-value.

Betting on Eldorado is in many ways viewed as equal to betting on Eldorado’s management team. In which case the triple-digit mark isn’t that far-fetched after all. All that remains to be down now, according to Wieczynski at least, is to keep riding the coattails of a proven management team.

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