Downtown Las Vegas Ambiance Assessed Negatively by Financial Expert
In a report to clients on July 21, 2025, Deutsche Bank analyst Steven Pizzella expressed concerns about the upcoming third quarter of 2025 for Las Vegas Strip casino operators. The current outlook for these stocks is mixed, with sentiment remaining weak due to tepid visitation and disappointing revenue trends.
Visitation to the Las Vegas Strip has been sluggish, with year-to-date non-convention visitation down 8.3% year-over-year. Additionally, the revenue per available room (RevPAR) has been trending downward, a key indicator of hotel performance. The average weekly Las Vegas RevPAR was down by approximately 20% in the first two weeks of July 2025, and STR Las Vegas RevPAR was down 19.2% in June 2025 compared to the same period last year.
Pizzella also forecasts disappointing EBITDAR results for the current quarter, which could further dampen investor sentiment. This gloomy outlook is reflected in the stock prices of some operators, such as Caesars Entertainment, where elevated interest rates could be weighing on the company's ability to sell assets due to higher financing costs for prospective buyers.
However, digital gaming, including iGaming and online sports wagering, is identified as a bright spot for the Las Vegas Strip industry. Operators such as DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) are seen as better ways to access this investment theme.
Investor sentiment regarding Las Vegas Strip operators is also affected by concerns about the earnings trajectory of companies like Las Vegas Sands, which reported strong Q2 earnings but faces uncertainty about future earnings. MGM Resorts, on the other hand, has seen a stock price target increase from some analysts due to future demand projections, though others have downgraded their outlook citing financial concerns.
Despite these challenges, Pizzella expresses a bullish outlook for 2026 through 2027 for Las Vegas Strip operators, beyond group occupancy and rates, also including food and beverage/catering commitments. The strength of the longer-term setup for the Las Vegas Strip may be related, in part, to share gains from other large group host city competitors, with technology-related business playing a role.
To defray some of the risk associated with a potential retrenchment in discretionary spending, market participants can evaluate shares of data providers Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD). These companies, which provide sports betting data, offer a fixed recurring revenue stream growing at low to mid-teens compound annual growth rates, making them an attractive option for longer-term oriented investors.
[1] Las Vegas Sands Q2 Earnings Exceed Expectations but Future Earnings Trajectory Uncertain. (2025). CNBC. https://www.cnbc.com/2025/07/20/las-vegas-sands-q2-earnings-exceed-expectations-but-future-earnings-trajectory-uncertain.html
[2] Pizzella, S. (2025). Deutsche Bank Research Report on Las Vegas Strip Operators. Deutsche Bank.
[3] Analysts Raise Stock Price Target for MGM Resorts Amid Future Demand Projections, but Others Downgrade Outlook. (2025). Bloomberg. https://www.bloomberg.com/news/articles/2025-07-15/analysts-raise-stock-price-target-for-mgm-resorts-amid-future-demand-projections-but-others-downgrade-outlook
- In a Deutsche Bank report, analyst Steven Pizzella raised concerns about the financial performance of Las Vegas Strip casino operators in the upcoming third quarter of 2025, due to sluggish visitation and disappointing revenue trends.
- Visitacion to the Las Vegas Strip has decreased by 8.3% year-over-year as of 2025, and the revenue per available room (RevPAR) has been trending downward, which is a key indicator of hotel performance.
- Pizzella also forecasted disappointing EBITDAR results for the current quarter, potentially dampening investor sentiment, and this outlook is reflected in the stock prices of companies like Caesars Entertainment.
- In contrast, digital gaming, including iGaming and online sports wagering, is viewed as a promising investment theme for the Las Vegas Strip, with DraftKings (NASDAQ: DKNG) and Flutter Entertainment (NYSE: FLUT) being highlighted as better investment options.
- Despite the challenges ahead, Pizzella is bullish on the outlook for Las Vegas Strip operators beyond group occupancy and rates, including food and beverage/catering commitments, for the years 2026 through 2027. To mitigate the risk of a downturn in discretionary spending, investors may consider shares of data providers like Genius Sports (NYSE: GENI) and Sportradar (NASDAQ: SRAD).
