VICI: Future Returns Will Depend On Caesars Regional Rent Negotiations

Analysts have modestly reduced their fair value estimate for VICI Properties to about $35.73 from $36.09. This reflects a slightly higher perceived risk profile, tempered long term growth expectations in regional gaming, and concerns around potential rent pressure on key leases.

Analyst Commentary

Street research on VICI Properties has become more mixed, with analysts divided between confidence in the long term net lease growth story and caution around regional gaming exposure and key tenant risks. This divergence helps explain the modest trimming of fair value estimates despite a still generally favorable view on the companys balance sheet and cash flow visibility.

Bullish Takeaways

Bullish analysts continue to assign Overweight and Outperform ratings. They argue that VICI remains a high quality net lease REIT with durable cash flows and a differentiated gaming focus that can support premium valuation multiples over time.
Recent upward and reaffirmed price targets in the mid to high 30 dollar range reflect confidence that updated net lease models, including rolled forward AFFO estimates through 2027, still support mid single digit to high single digit annualized total return potential.
Positive views emphasize that broader REIT sector normalization over the next 12 to 24 months, especially in net lease, could unlock multiple expansion for VICI if management executes on disciplined capital allocation and maintains conservative leverage.
Supportive research highlights VICI as a beneficiary of a stable, long duration lease structure. It suggests that even in a slower growth environment, incremental acquisitions and contractual rent escalators can underpin steady AFFO growth.

Bearish Takeaways

Bearish analysts have moved to more neutral stances and trimmed price targets into the low 30 dollar range, flagging a less compelling near term risk reward skew relative to other REIT opportunities.
The most prominent concern centers on the Caesars regional lease. Flat to negative expected regional gaming growth could eventually force a rent cut, pressuring cash flows and challenging the current valuation framework.
Muted fee simple gaming investment opportunities are seen as limiting VICI s ability to drive outsized external growth. This raises the risk that AFFO growth underperforms prior cycles and justifies only a modest valuation premium.
Collectively, these cautious views suggest downside risk to rental income concentration and a more volatile earnings trajectory if regional fundamentals weaken further or tenant negotiations become less favorable.

What's in the News

VICI Properties agreed to a new long term Northfield Park Lease with an affiliate of Clairvest, featuring initial annual base rent of $53 million, or $54 million if the transaction closes after May 1, 2026, with a 25 year initial term and three 10 year renewal options (Key Developments)
The Northfield Park Lease will mirror key economic terms of the MGM Master Lease, including 2.0% annual rent escalators and, starting in 2032, escalation equal to the greater of 2.0% and CPI capped at 3.0%, plus a minimum capital expenditure requirement equal to 1.0% of annual net revenue (Key Developments)
In connection with MGM Resorts divesting the operations of MGM Northfield Park, VICI will amend the MGM Master Lease, reducing its annual base rent by $53 million, or $54 million if closing occurs after May 1, 2026 (Key Developments)
The new lease will be guaranteed by an affiliate of funds managed by Clairvest that will own Northfield Park’s operations, adding a new institutional counterparty to VICI’s tenant roster while preserving long dated rental income from the property (Key Developments)

Valuation Changes

Fair Value Estimate has edged down slightly to approximately $35.73 from $36.09, reflecting a modestly higher perceived risk profile.
Discount Rate has risen slightly to about 8.29% from 8.25%, indicating a small increase in the required return for VICI s cash flows.
Revenue Growth has ticked up marginally to roughly 3.73% from 3.72%, suggesting a very modestly stronger long term topline outlook.
Net Profit Margin has improved slightly to around 71.44% from 71.28%, implying a small enhancement in expected profitability.
Future P/E Multiple has declined modestly to about 15.9x from 16.1x, pointing to a slightly less generous valuation assumption on forward earnings.

Demographic and consumer trends favor VICI's diversified experiential assets, supporting stable occupancy, revenue growth, and reduced tenant risk.
Inflation-protected leases, disciplined funding, and strategic acquisitions position VICI for resilient earnings, dividend growth, and long-term asset value expansion.
Shifts to online gaming, tenant concentration, lending risks, funding constraints, and expansion into competitive non-gaming sectors all challenge sustainable revenue and earnings growth.

Catalysts

About VICI Properties

An S&P 500 experiential real estate investment trust that owns one of the largest portfolios of market-leading gaming, hospitality, wellness, entertainment and leisure destinations, including Caesars Palace Las Vegas, MGM Grand and the Venetian Resort Las Vegas, three of the most iconic entertainment facilities on the Las Vegas Strip.What are the underlying business or industry changes driving this perspective?

The aging U.S. population with rising discretionary income is driving steady demand for leisure and experiential activities, which supports robust, long-term occupancy and rent growth for VICI's diversified portfolio of gaming, hospitality, and experiential assets; this underpins predictable revenue streams and supports sustained growth in net operating income.
Structural shifts in consumer spending toward experiences such as travel, sports, group events, and entertainment are expanding opportunities in VICI's experiential and non-gaming real estate segments, creating new revenue streams, lowering tenant concentration risk, and providing a long runway for top-line growth.
High inflation and the appeal of reliable, inflation-linked cash flows make VICI's triple-net leases with contractual escalators highly attractive to investors seeking income and an inflation hedge, leading to resilient FFO and dividend growth potential even in a turbulent macro environment.
The company's scale, access to $2.9 billion in liquidity, and disciplined internal funding position enable accretive acquisitions and partnerships without near-term dependence on capital markets; this supports earnings and AFFO per share growth while maintaining low G&A expenses and strong net margins.
Ongoing tenant reinvestment in VICI-owned properties, catalyzed by favorable tax law changes (bonus depreciation), and continued capital deployment into high-demand experiential real estate (e.g., theme parks, sports facilities, convention hotels) should increase asset value and future rental income, driving long-term earnings and net asset value expansion.

VICI Properties Earnings and Revenue Growth

VICI Properties Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming VICI Properties's revenue will grow by 3.4% annually over the next 3 years.
Analysts assume that profit margins will shrink from 70.2% today to 64.2% in 3 years time.
Analysts expect earnings to remain at the same level they are now, that being $2.8 billion (with an earnings per share of $2.9). However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $3.2 billion in earnings, and the most bearish expecting $2.5 billion.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 18.2x on those 2028 earnings, up from 12.8x today. This future PE is lower than the current PE for the US Specialized REITs industry at 30.5x.
Analysts expect the number of shares outstanding to grow by 1.16% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.71%, as per the Simply Wall St company report.

VICI Properties Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The ongoing shift toward iGaming and online sports betting creates the risk of long-term erosion in the appeal and performance of VICI's physical casino real estate, potentially undermining demand, reducing tenant revenues, and threatening occupancy and lease renewal rates, which in turn could negatively impact core revenue growth.
VICI's tenant base remains highly concentrated among a small number of major gaming operators (like Caesars and MGM), meaning financial distress, changing business models, or declining performance at any of these key tenants could result in rent payment defaults, lease renegotiations, or weakened rent escalations, directly endangering rental income and net operating margins.
The company's strategy of increasing exposure to mezzanine lending, shorter-duration credit, and development loans introduces interest rate, refinancing, and project execution risks-if projects experience delays or defaults or the credit environment deteriorates, anticipated earnings and FFO per share growth may falter, limiting dividend sustainability.
Although VICI maintains disciplined leverage, the company's ability to fund external growth through retained earnings rather than equity or debt issuance may be tested in an environment of limited acquisition opportunities and rising costs of capital, potentially restricting AFFO per share growth and margin improvements if market conditions turn adverse.
While VICI is diversifying into non-gaming experiential assets (theme parks, youth sports, ski resorts), these sectors face significant competition from other forms of leisure and entertainment, rapid shifts in consumer behavior, and increasing competition from private equity and alternative capital providers-all of which could moderate long-term top-line growth and compress earnings if expected returns fail to materialize.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $36.727 for VICI Properties based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $44.0, and the most bearish reporting a price target of just $34.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.3 billion, earnings will come to $2.8 billion, and it would be trading on a PE ratio of 18.2x, assuming you use a discount rate of 7.7%.
Given the current share price of $33.12, the analyst price target of $36.73 is 9.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Rising US Experiential Demand Will Unlock Long-Term Value