Canaccord cuts PENN Entertainment target to $26, keeps buy rating

On Monday, Canaccord Genuity analysts adjusted their outlook on PENN Entertainment Inc (NASDAQ:PENN), lowering the stock’s price target to $26.00 from the previous $28.00, while still holding a Buy rating on the shares. The stock currently trades at $15.97, having declined 19.42% year-to-date, with analyst targets ranging from $16.50 to $30.00.

PENN Entertainment, known for its gaming and entertainment services, has reportedly hit a snag in its growth trajectory. According to Canaccord Genuity, the company’s progress in gaining handle share, which had been on the rise in the second half of 2024, seemed to have stalled in the first quarter of this year. This development marks a pivotal period for the company’s ESPN BET operations throughout the remaining months. InvestingPro data shows the company maintains modest revenue growth of 3.38%, though stock price movements have been notably volatile with a beta of 1.96.

The analysts anticipate that PENN Entertainment’s management will likely address its digital strategy in the near future. Additionally, updates are expected regarding consumer spending patterns at the company’s land-based casinos and the progress of key retail growth projects. With earnings scheduled in just 3 days, InvestingPro subscribers can access 8 additional key insights and a comprehensive Pro Research Report for deeper analysis.

This adjustment in price target reflects the analyst’s observations of the company’s recent performance and its potential moving forward. The maintained Buy rating suggests that despite the reduction in the price target, Canaccord Genuity still sees a positive outlook for the stock.

Investors will be looking to the company’s upcoming communications for further insights into its strategies and performance, particularly in the digital space, which is becoming increasingly important for gaming and entertainment companies.

In other recent news, PENN Entertainment Inc. has announced changes to its Board of Directors, nominating Johnny Hartnett and Carlos Ruisanchez to fill upcoming vacancies. This decision follows the retirement of Ron Naples and the planned non-reelection of two other board members. Meanwhile, Mizuho (NYSE:MFG) Securities has raised its price target for PENN to $25, maintaining an Outperform rating, citing strong operational performance and upcoming asset openings. In contrast, Needham has reduced its price target to $25 from $26 but continues to hold a Buy rating, focusing on the challenges faced by PENN’s interactive segment and its partnership with Disney (NYSE:DIS). Benchmark analysts have maintained a Hold rating, noting the mixed performance of PENN’s segments, with resilience in retail but struggles in interactive gaming. Raymond (NSE:RYMD) James has reiterated a Market Perform rating, emphasizing the importance of PENN’s digital profitability journey. PENN’s strategic focus on iGaming and market expansion, particularly in Canada, is being closely monitored by investors and analysts alike. The company’s recent $350 million share buyback program underscores management’s confidence in future prospects.

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