Stifel’s 2026 Gaming & Leisure Outlook

Stifel’s Gaming & Leisure 2026 Outlook has picked Caesars, Penn Entertainment, and Flutter as “top ideas” and gaming stocks for the upcoming year.

Because digital gaming stocks underperformed in 2025, Stifel sees these stocks as “attractive” risk/reward companies.

Caesars’ 2026 Outlook

Despite being the top pick for Macau and Las Vegas, Stifel believes Caesars remains undervalued as a digital asset.

“Even with continued handle/hold growth well in the double-digit percentage range on the iGaming side and idiosyncratic tailwinds in OSB, investors remain unwilling to give CZR credit for the company’s target of $500M in run-rate digital EBITDA in FY26,” Stifel wrote.

Caesars’ stock fell by over 28% in 2025, down over 40% from its closing high. Still, Stifel has Caesars’ price target at $39, a 64.1% upside.

Caesars could benefit if the stock approaches that target, which could lead to more of the digital business being spun off.

Penn’s 2026 Outlook

Penn Entertainment is coming off a year full of massive changes, notably a $2 billion acquisition of theScore.

Penn was once aligned with Barstool Sports before selling the company back to its founder, Dave Portnoy. Penn then launched a brand licensing agreement with ESPN Bet in late 2023. Penn’s agreement with ESPN Bet ended with the acquisition of theScore in November 2025.

Overall, Penn spent $550 million on Barstool Sports and then had an $850 million write-down on the sale. This came out to $1.2 billion in cumulative adjusted EBITDA losses for a four-year period from 2021 to 2025.

Even though Penn fell 23.3% in 2025, Stifel still has Penn as the “top regional gaming operator pick,” with a price target at $37.

Penn will now enter a transition period, as a COO will soon be named to run the online casino and sports betting.

Flutter’s 2026 Outlook

The world’s online betting company is Flutter Entertainment. Many gamblers will quickly recognize Flutter’s brands, including FanDuel, Betfair, and PokerStars.

Flutter remains a top digital gaming idea for Stifel in 2026.

While Stifel remains neutral on Flutter’s US operations, higher taxes in the United Kingdom caused the target price to fall.

Flutter fell by nearly 16% in 2025, so Stifel decreased the price target to $304.

Despite these changes, Stifel believes Flutter can refocus on “attractive underlying fundamentals” even if the company faces more taxes, volatility, and regulation.

For promos in US sports betting, Stifel likes Flutter to improve, while DraftKings’ NFL offers and Fanatics’ profitability targets are “unsustainable.”