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On Friday, Benchmark analysts maintained their Hold rating on PENN Entertainment Inc (NASDAQ: PENN) shares, currently trading at $20.28 with a market capitalization of $3.04 billion. The analysts evaluated the company’s growth strategy that includes expanding its retail casino portfolio and enhancing its interactive segment, particularly with ESPN BET. PENN Entertainment is also focusing on increasing customer engagement through cross-channel integrations.
The company’s land-based operations have been described as stable, but Benchmark analysts pointed out that new competition in key markets could present significant challenges. According to InvestingPro data, PENN operates with a significant debt burden and has not been profitable over the last twelve months, with earnings per share at -$3.53. Despite strong user growth for ESPN BET, achieving profitability continues to be a challenge, especially given the intense competition from industry rivals such as DraftKings (NASDAQ:DKNG) and FanDuel.
PENN Entertainment is looking forward to the launch of the Hollywood iCasino app, which is expected to offer a high-margin opportunity. However, the analysts noted that scaling the business could be a potential hurdle for the company. Get deeper insights into PENN’s growth potential with InvestingPro, which offers exclusive analysis and 6 additional ProTips.
Financially, PENN Entertainment maintains a high beta of 2.08, indicating significant stock price volatility. While the company generated $6.3 billion in revenue, according to InvestingPro’s Fair Value analysis, the stock appears fairly valued at current levels. Nonetheless, according to Benchmark analysts, the success of the company’s interactive gaming segment will be crucial for its long-term growth prospects.
In other recent news, Penn Entertainment has been experiencing significant developments. The company reported steady Q3 results, with retail revenue reaching $1.4 billion and adjusted EBITDA at $472 million. Major shareholder HG Vora has initiated a proxy fight, nominating individuals such as Carlos Ruisanchez, William J. Clifford, and Johnny Hartnett for independent board seats. Penn Entertainment also announced a long-term partnership with Monumental Sports & Entertainment, securing online market access for its ESPN Bet platform in Washington D.C. On the analyst front, JPMorgan upgraded Penn Entertainment from Neutral to Overweight, while BofA Securities maintained a Neutral rating. The company also launched its Hollywood Casino (EPA:CASP) mobile application in Pennsylvania, with plans to expand it to more jurisdictions in early 2025. These are the recent developments in Penn Entertainment.
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