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On Monday, Benchmark analysts maintained their Hold rating on PENN Entertainment Inc (NASDAQ:PENN), highlighting the company’s mixed performance in the fourth quarter of 2024. With annual revenue of $6.58 billion and a market capitalization of $3.2 billion, PENN’s retail segment showed resilience with steady demand and limited new competition, which helped balance the company’s financials despite the ongoing challenges in its Interactive division. According to InvestingPro data, the stock’s beta of 2.19 indicates significant price volatility, warranting careful investor consideration.
PENN’s Interactive segment, particularly ESPN BET, continued to face difficulties, underperforming in a competitive market. Operating with a debt-to-equity ratio of 3.69, the company faces significant financial obligations while working to improve profitability. Conversely, the Hollywood iCasino demonstrated promising early results, capturing more of the market in Pennsylvania and Michigan. Analysts expect that the upcoming standalone Hollywood iCasino launch in multiple states will attract new users and contribute to revenue growth, with analyst price targets ranging from $18.50 to $30.
The company is also looking forward to several key events that could act as growth catalysts. These include the reopening of Hollywood Joliet as a new land-based casino in late 2025 after a temporary closure, the openings of new facilities in Aurora, Columbus (WA:CLC), and M Resort in early 2026, expansion into the Alberta market, and a strategic focus on reducing losses in the Interactive segment.
In addition to these developments, PENN’s management has announced a significant $350 million share buyback program, signaling confidence in the company’s future prospects and commitment to delivering value to shareholders.
Investors will be watching closely to see how these initiatives impact PENN’s performance in the coming months, as the company aims to strengthen its position in both the retail and interactive gaming sectors. InvestingPro analysis indicates that PENN’s stock is currently trading near its Fair Value, with additional insights available in the comprehensive Pro Research Report, which offers deep-dive analysis of this and 1,400+ other US stocks.
In other recent news, PENN Entertainment Inc. reported its fourth-quarter 2024 earnings, which fell short of analysts’ expectations. The company posted an earnings per share (EPS) of -0.44, missing the anticipated -0.29, and revenue came in at $1.4 billion against a forecast of $1.69 billion. Following the earnings report, Needham analysts adjusted their price target for PENN to $25, maintaining a Buy rating, while Stifel increased their target to $22, keeping a Hold rating. Canaccord Genuity also maintained a Buy rating with a $28 target, noting solid fourth-quarter results buoyed by geographic diversity and digital platform engagement.
The company’s fiscal year 2025 guidance aligned with market expectations for retail but indicated higher-than-expected losses in the interactive segment. PENN aims to achieve breakeven in its digital segment by the end of 2025, with its first profitable quarter anticipated in Q4. Management acknowledged the slower progress of its ESPN Bet platform and indicated potential cost structure revisions if significant advancements are not made this year. PENN is also progressing with physical expansion plans, including the Hollywood Casino (EPA:CASP) Joliet, expected to open in the fourth quarter of 2025.
Overall, analysts from firms like Needham, Stifel, and Canaccord Genuity highlighted the challenges and opportunities facing PENN, emphasizing the importance of its partnership with Disney (NYSE:DIS) and the potential for growth in its interactive offerings.
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