Successful unconventional oil and gas production relies on horizontal drilling and hydraulic stimulation. Wellbore casing deformation–including distributed bending (buckling), zones of ovality, and discrete shearing–can hinder deployment of downhole tools and, in severe cases, lead to complete well loss. Geological factors (e.g., stress and pore pressure states, rock properties) represent root causes for wellbore casing damage that can result from discrete slip of faults, fractures, and bedding interfaces. Geomechanical models demonstrate changes in principal stress orientations and magnitudes accompanying hydraulic stimulation that result in sliding along faults, fractures, and especially bedding planes in highly mechanically stratified systems. Consequently, potential for casing deformation driven by bedding-plane slip warrants careful consideration. This study focuses on (i) quantifying the location, timing, and magnitude of localized layer slip in response to fluid injection during multistage hydraulic stimulation via large-scale, three-dimensional (3D) geomechanical models and (ii) analysis of casing deformation as a function of bedding-plane slip magnitude via refined 3D geomechanical models that include a horizontal wellbore and casing-cement-rock (mechanical stratigraphy) system. The large-scale models demonstrate that bedding-plane slip is a fundamental deformation response to hydraulic stimulation and document that (i) bedding-plane slip extends vertically and laterally away from injection sites, (ii) sequential stages contribute to increase in slip magnitude, (iii) slip magnitudes along bedding interfaces that bound injection intervals can reach several tens of centimeters (∼25 to >50 cm), and (iv) injection rate and initial pore pressure strongly influence the magnitude and distribution of bedding-plane slip. The refined models reveal that (i) bedding-plane slip magnitudes that exceed 5 cm result in substantial deformation to casing that is manifest by ovality of ≥10% and reduction in minimum casing diameter of ≥3 cm, (ii) the style and intensity of the deformation varies with position along the casing relative to bedding-plane intersection, and (iii) deformation is controlled by the nature of the interfaces between the casing-cement and cement-rock as well as the variability in cement thickness for casing that is not centered in the wellbore.