PENN Rides the Gaming Wave Ahead of Barstool Sportsbook Launch, Analyst Raises PT to $62
Penn National Gaming’s better-than-expected reopening at brick and mortar locations in the recent quarter, combined with investor exuberance for the upside from online betting, is sending shares of the casino stock soaring.
Analyst John DeCree said in a report that the jump in the stock is largely a result of strength in the regional gaming business leading to an improved free cash flow outlook for the rest of the year. Additionally, DeCree is optimistic about the initial launch of Hollywood iCasino in Pennsylvania, where it has won 10% share of the iCasino market. He also emphasizes that the Barstool Sports network is a powerful funnel to convert its audience into sportsbook users.
“We want to stick around and see what PENN and Barstool can do when their mobile platform is up and running and live sports are back in full swing. We see PENN as a must-own stock here and are reiterating our Buy rating with a new $62 price target.”
Barstool Sportsbook app: The highly anticipated mobile sports betting app by Barstool Sports remains on schedule for a September launch, and is expected to be a major driver for shares of PENN. PENN bought Barstool in the beginning of the year for $450 million.
“Ultimately, until we see any indication of the sports betting euphoria dissipating or evidence of fundamental weakness in PENN’s brick and mortar portfolio, we see no reason to move to the sideline,” says Stifel analyst Steven Wieczynski, who raised his price target to $47 in response to the earnings results.
