• Thu. Feb 25th, 2021

Penn Nationwide Analysts Divided on Destiny of Sizzling Gaming Inventory

BySpeed Casino

Jan 15, 2021

Posted on: January 14, 2021, 12:25h. 
Final up to date on: January 14, 2021, 01:03h.

Todd Shriber Learn Extra

Broadly talking, Wall Road analysts are bullish on Penn Nationwide Gaming (NASDAQ:PENN). However that view isn’t common, with loads of sell-side debate on the title rising right this moment.

A slots participant at Penn Nationwide Racecourse in Pennsylvania. Some analysts are divided on the inventory. (Picture: Getty Photographs)

At the least three analysts chimed in on the regional gaming inventory on Thursday. Views ranged from clearly enthusiastic to overtly bearish to one thing in-between.
Getting the dangerous information out of the way in which first, no less than so far as Penn buyers are involved, Loop Capital analyst Daniel Adam downgraded the inventory to a “promote” score and a $60 value forecast. That’s far beneath the $104-ish deal with at which the shares at present reside.
Penn inventory is up greater than 286 % over the previous 12 months, as buyers are wagering on the corporate’s skill to seize a big slice of the rising on-line sports activities betting market. Nevertheless, Adam calls that rally “unwarranted,” and notes that the operator’s Barstool Sportsbook app is just reside in Pennsylvania (it’s quickly launching in Michigan), the place it’s dropping market share.

The inventory has meaningfully outperformed over the previous 12 months (up ~300% vs. +16% for the S&P 500 Index), which we attribute to buyers’ ‘hope’ that PENN can efficiently capitalize on the rising on-line gaming alternative within the US,” mentioned the analyst.

He provides there are too many purple flags surrounding Penn in the mean time to warrant a “maintain” score. His $60 projection is properly beneath the Wall Road consensus of $80.
That doesn’t imply he’s bearish on sports activities wagering shares. Fairly the other. Adam has a $100 value goal on Penn rival DraftKings (NASDAQ:DKNG) and Loop Capital not too long ago mentioned DraftKings is one among its high concepts for 2021.
Bullish View
As famous above, Penn enjoys loads of sell-side assist. Depend Truist analyst Barry Jonas amongst that group. He reiterated a “purchase” score on the inventory whereas bumping his value estimate to $120 from $85. That suggests upside of greater than 15 % from present ranges.
“PENN shares aren’t low-cost, however we proceed to see momentum across the Barstool (each for sports activities betting and the rising worth of its media model),” mentioned Jonas.

The Truist analyst supplied up another commentary for shareholders on this gaming fairness. He notes that whereas numbers for the fourth quarter will probably be comfortable due to the coronavirus pandemic, administration commentary on vaccine distribution might sign robust demand over the approaching quarters.

“A tidal wave of pent-up demand for in-person social engagement and experiences” may gain advantage Penn’s regional on line casino operations later this 12 months, in accordance with Jonas.
That’s related to buyers, as a result of a lot of the passion ascribed to Penn inventory is attributable to on-line casinos and sports activities wagering, with land-based operations virtually going neglected.
Within the Center
Clearly, Jonas and Loop Capital’s Adam are at reverse ends of the spectrum concerning their views on Penn inventory.
Within the center is KeyBanc analyst Brett Andress. Initiating protection of a slew of gaming equities right this moment, Andress tagged Penn with a “sector weight” score, implying the title will carry out in keeping with its friends.
He’s bullish on the corporate’s iGaming and sports activities betting setup through Barstool Sports activities however says market members are assigning “considerably lofty assumptions” to these companies.
For all of the analyst chatter on it right this moment, Penn inventory is simply barely decrease in late buying and selling.

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