Lack of Asian exposure to hurt Caesars, Bernstein says

Brokerage Sanford C. Bernstein announced Caesars’ growth is expected to be limited due to its lack of exposure in Asia.

US.- As the industry continues to look into Japan, brokerage Sanford C. Bernstein announced it expects Caesars Entertainment Corp to remain focused in the United States, which would limit its growth. Analysts forecasted the company not to have further exposure in Asia, something that would eventually hurt its business.

“Our fundamental view of the company remains unchanged – we believe Caesars’ long-term value is limited by execution overhang and limited organic growth,” said Sanford Bernstein in a note following Carl Icahn’s move in the company. “Caesars is a U.S.-focused operator with no Asia exposure. We believe its potential foray into South Korea is of limited value and its U.S. business will experience limited organic top-line growth,” analysts Vitaly Umansky, Eunice Lee and Kelsey Zhu explained.

Despite its Incheon project, the company’s value “is limited by execution overhang and a lack of exposure to Asia growth,” the brokerage says.

“There are some value-creating opportunities that can be done without a full merger/sale that may create short-term value,” analysts said about the potential merger suggested by Mr. Icahn. “One key question is really whether Icahn is a long-term investor looking to create value with the existing company or looking to flip his ownership for more immediate returns. He has done both in the past,” they added.