Jim Cramer Says Don't Bet on Casino Stocks

Jim Cramer gives his thoughts on the casino stocks.
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Let's go over the casino sector. 

Caesars reported earnings that disappointed. Revenue dropped 14% in the first quarter to $1.83 billion from $2.12 billion a year earlier. Analysts polled by FactSet predicted revenue of $2.01 billion for the latest quarter.

“Our first-quarter performance reflects the significant revenue declines we experienced as a result of the closures and stable year over year labor costs in March, as we continued to provide pay and benefits to our team members for the first two weeks of the closure period," Caesars CEO Tony Rodio said in a statement.

“In Las Vegas, Atlantic City, Council Bluffs and Lake Tahoe, Caesars plans to reopen properties in phases in line with anticipated business demand,” Caesars said in a statement.

And last week, MGM was reinstated at J.P. Morgan with a neutral rating. Analyst Joseph Greff said in a note to clients that the neutral rating follows a period of restriction. Prior to the restriction, J.P. Morgan carried an overweight rating and a year-end 2020 price target of $40 a share.

"We forecast a slow recovery on the Las Vegas Strip, a market that is dependent on both airlift and convention and group-related travel and critical to MGM," Greff said. 

So, what does Jim Cramer think about this sector? 

Cramer said he's not betting on casino stocks anytime soon as they require crowds. "Crowds are the enemy of social distancing," Cramer said. 

Watch the full video above for more.

You can follow Jim Cramer and Katherine Ross on Twitter at @JimCramer and @byKatherineRoss. Read more from Katherine Ross here. 

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