Starting Monday morning's predictions off with a bang, self-described "boutique investment bank" Union Gaming set a new $100 price target for casino company Caesars Entertainment (CZR) and issued a research note highlighting the enterprise's potential. Since Caesars opened at $57.80, this bold forecast represents a 73% predicted upside for the stock, as reported by Seeking Alpha.

The background to the prediction lies in Caesars' $3.7 billion acquisition of William Hill (WIMHY), a sports betting company based in London but with major operations in the U.S. as well. The two companies already share a joint venture, and Caesars held a 20% interest in William Hill's American branch even before the announced acquisition. 

Someone fitting together two puzzle pieces, held up in front of the sun.

Image source: Getty Images.

According to a press release from Caesars, the company has a "compelling strategic rationale" for the acquisition. It highlighted the sports betting sector's growth possibilities, noting a "potential total addressable market size ranging up to $30-35 billion."

Today's dramatic Union Gaming price target increase is explained in a research note from the investment bank's global head of institutional research, John DeCree. DeCree pointed out the merged Caesars and William Hill sports betting will generate comparable levels of revenue from U.S. gambling to DraftKings, but compared to DraftKings' approximate current market value of $25 billion, Caesars' is now extremely underpriced, based on valuation analysis he says "implies the market is ascribing just $18/share (~$3.8bn) to CZR's sports/iCasino business."

DeCree says that while Caesars' sports betting is projected to match the revenue of DraftKings, the $100 price target is actually below the Caesars' share price that implies, since Union Gaming feels Caesars won't "entirely close the valuation gap." In fact, some analysts believe DraftKings is heavily overvalued