Shares of Penn Entertainment (NASDAQ: PENN) have experienced a tumultuous year, marked by a 26% decline year-to-date, counterbalanced by a notable 20.7% surge over the last 90 days. This recent uptick has sparked optimism about a sustained recovery for the beleaguered regional casino stock.
Analysts are cautiously optimistic about Penn Entertainment’s prospects. Barry Jonas of Truist Securities, for example, recently met with Penn’s management team and reaffirmed a “buy” rating along with a $25 price target. This suggests nearly a 30% upside from the current stock price of $19.24. Jonas emphasized what he sees as “largely steady” trends at Penn’s land-based casinos, asserting that the company possesses “real unrecognized value.”
Speculation about a potential takeover of Penn has been rampant since late May, following a letter from the Donerail Group urging the board to consider selling the company to enhance shareholder value. Despite this, analysts generally agree that such a transaction is unlikely, citing Penn’s probable unwillingness to sell.
Adding a layer of intrigue, the approaching football season is seen as critical for ESPN Bet, Penn’s sports betting venture. The recent hiring of Aaron LaBerge, a former Walt Disney (NYSE: DIS) executive, as Chief Technology Officer (CTO) could be a game-changer. LaBerge’s previous experience at Disney, where he was instrumental in developing mobile applications for ESPN and its fantasy sports games, is viewed as a significant asset, even though he hasn’t worked in the gaming sector before.
Jonas believes LaBerge’s background equips him to handle the competitive pressures in the online sports betting market, drawing parallels to Disney’s ability to eventually compete with Netflix in the streaming space, despite Netflix’s significant head start.
While Penn’s land-based casinos generate most of the company’s earnings and revenue, ESPN Bet has captured significant investor attention. Enhancements to the sports betting app are crucial, with Jonas noting that its growth is expected to be gradual but promising. He praised Penn’s efforts to appeal to both avid and recreational bettors, highlighting the app’s increasing popularity among female users.
A key issue that remains is Penn’s Hollywood Casino-branded iGaming platform, which has yet to see significant benefits from conversions from ESPN Bet. Jonas indicated that Penn’s management is highly focused on improving iGaming execution, underscoring its potential impact on the company’s broader strategy.
 shows promise despite a 26% YTD decline, with a recent 20.7% surge and analyst backing hinting at potential recovery.){kind=link}