CBRE lowered its second- and third-quarter earnings estimates for Las Vegas Strip casinos impacted by a summer slowdown, but predicted a strengthening in the fourth quarter and the start of 2026.
John DeCree, director of equity research at CBRE, said trends on the Strip have softened throughout the second quarter ahead of the typical summer slowdown. He expects “even more pronounced seasonality heading into the hottest months of the year in the third quarter.”
DeCree noted that Las Vegas visitation is down 6.5% through May and Strip revenue per room is down 5.9% so far this year. Gaming revenue is down 1.1%.
“The slowdown is due to a confluence of factors, including lower international visitation to Las Vegas from the two primary international feeder markets of Mexico and Canada, tariff headlines and macroeconomic uncertainty that could be weighing on leisure travel, and cost creep in Las Vegas that could deter more value-oriented visitors that are key to the summer off-season,” DeCree said. “Higher-end and luxury properties on the Strip have been more resilient, while value-oriented assets are facing greater occupancy issues, particularly mid-week, with a lighter convention calendar during the off-season.”
Given the recent trends, DeCree lowered the second- and third-quarter Strip estimates across the board for Caesars Entertainment, MGM Resorts International, Wynn Resorts, and Golden Entertainment, all of which will report their earnings over the next two weeks. Wynn has the most modest revisions as a premium property, while Golden, which owns the Strat, will have more meaningful revisions, DeCree said.
“Despite the softer leisure trends, we aren’t sounding the alarm on Las Vegas yet, with a robust group and convention calendar that should offset leisure softness and provide some earnings stability in the fourth quarter and first quarter of 2026,” DeCree said. “The Strip is more diversified and better suited to weather economic cycles than in the past, with a broader customer draw, including live music and sports tourism, anchored by Sphere, Grand Prix, and professional sports. Longer term, Las Vegas is poised for further growth in these segments with major developments, including the A’s stadium and potentially an NBA expansion team, among others. However, in the near term, the macroeconomic and political climate appears to be impacting leisure demand.”
DeCree downgraded Golden from Buy to Hold, while maintaining a price target of $33.
“Golden has been one of our top calls, dating back as far as 2016 when the market cap was less than $200 million,” DeCree said. “Management has executed on all fronts, creating meaningful value for shareholders through M&A (both acquisitions and divestitures), fortifying the balance sheet, and is now returning capital to shareholders.”
With the shares currently trading near CBRE’s $33 price target, DeCree said they are downgrading the stock to Hold on valuation, but remain constructive on the company and management’s more conservative balance-sheet strategy.
“We would look for incremental upside in the shares to come from a visitation/occupancy recovery on the Strip and/or external growth opportunities,” DeCree said. “Without a tangible growth catalyst, we expect the shares will remain range bound for now, which supports the hold rating. That said, Golden has one of the best balance sheets in the industry and is well positioned to capitalize on possible future growth opportunities and M&A. However, we expect both Strip trends and the M&A environment to remain unexciting over the next couple of quarters.
“Although the near-term Strip outlook is choppy, the diversified business models of Caesars (a Buy with a $50 price target) and MGM (a Buy with a $48 price target), including national regional casino footprints, online gaming, and Macau for MGM, remain key valuation drivers,” DeCree said. “We see the opportunity for upside in the shares of both companies as the digital EBITDA base expands and organic growth/M&A in the digital space outpaces traditional brick-and-mortar gaming.”
DeCree said this should lead to greater valuation appreciation for BetMGM and Caesars Digital. For Wynn, DeCree sees less risk to Las Vegas, given the company’s “unique premium positioning and long-term value creation from Wynn Al Marjan Island opening early 2027. “We’re maintaining our Buy rating on the shares of Wynn and raising our price target to $135 from $125,” DeCree said.
