Truist Analysts Optimistic About Q2 In Vegas, At Least On Higher End

Fresh off a week of touring Las Vegas properties and meeting with management teams, analysts at Truist Securities shared their takeaways Monday in an equity research report and noted overall growth for business in Sin City is possible in the second quarter of the year.

Specifically, although “April looks soft” according to Truist, “trends in May [look] very good” and June is “looking good too.”

Within that categorization, however, there is wide variation.

“The high end, premium customer and gaming customer remain resilient,” Truist wrote, “with the challenges still seen at the value tier,” which analysts estimate to represent 30-40% of the market. This aligns with views expressed last month by Las Vegas Review-Journal reporter David Danzis on the Low Rollers podcast, when he observed that resorts catering to higher-end clientele have been thriving while properties on the other end of the spectrum have struggled.

There is also variation in terms of one week to the next, depending on the event and conference schedules.

“Peak events still see extremely strong levels of demand, extending to large conferences (e.g. CES, Con/AGG); and events (e.g. New Years, CNY and larger programming at Allegiant and the Sphere),” the research report reads. “However, non-peak periods appear … softer than ever.”

Truist quoted an unnamed Las Vegas executive succinctly saying, “the peaks are getting higher, the troughs are getting lower.”

The analysts see the potential for RevPAR (Revenue Per Available Room) to begin climbing again by this summer, although much will depend on whether properties get the pricing right. In the summer of 2025, Truist notes, “rates were too high and moved lower as the booking window progressed.” Room rates for June through August on the Strip are more affordable overall for now, according to one operator Truist spoke with.

All eyes on Caesars, Hard Rock

Two of the hot topics at the moment are the potential acquisition of an iconic brand and the ongoing construction of an iconic symbol.

Reports that Golden Nugget owner Tilman Fertitta is close to buying Caesars Entertainment are driving conversation all over town, and interestingly, Truist rates Caesars Entertainment as a “buy” in this period of uncertainty.

(In addition to rating Caesars a “buy,” Truist gave the same label to Red Rock Resorts, Boyd Gaming, and Penn Entertainment, while dubbing MGM Resorts a “hold.”)

Meanwhile, the new Hard Rock Las Vegas that is replacing The Mirage is on track to open in late 2027, its trademark “guitar taking shape as a key part of the Vegas skyline,” Truist observed. Analysts expect this to be a case of a new property that truly makes an impact on the city.

“Most operators felt it would grow the market,” Truist wrote, “though it could be more competitive at the mid/high end while moving more momentum to the northern end of the Strip.”

It’s the economy, stupid

In the equity research report, Truist also took a step back and looked at wider economic factors and how they may impact Las Vegas in the months ahead.

Rising gas prices have been a major topic of conversation in the U.S. and globally since strikes on Iran Feb. 28.

“Historically,” Truist wrote, “gas prices have been cited as more of positive for gaming operators when they are lower [than] a negative when they are higher.” However, with lower-end properties already struggling, in this case, “elevated gas prices over a larger period of time are more worrisome.”

There is always hope for a bump in visitation and spending after tax refunds are distributed, although the current level of economic uncertainty may limit that bump this year. As Truist wrote, “there seems to now be more questions as to how much of any potential refund upside makes its way to gaming floors in the current environment.”