S&P 500 rises as health care, tech gain to overshadow Fed independence concerns
On Thursday, Canaccord Genuity analysts maintained their Buy rating and $28.00 price target on PENN Entertainment Inc (NASDAQ: PENN), following the company’s announcement of solid fourth-quarter results. The performance was buoyed by the geographic diversity of its land-based casinos and enhanced engagement from its digital platform, which helped to counterbalance heightened competition in certain markets. According to InvestingPro data, PENN currently trades at $20.39 with a market capitalization of $3.05 billion, suggesting potential upside to analyst targets despite operating with significant debt of $11.3 billion.
PENN Entertainment introduced a fiscal year 2025 retail outlook that aligned with market expectations. However, while digital revenue forecasts exceeded consensus, the digital EBITDA guidance fell short. The company anticipates that the losses from its Interactive segment will decrease sequentially through the third quarter, leading to its first profitable quarter in Q4. PENN reaffirmed its projection for Interactive segment profitability by 2026. InvestingPro analysis reveals the company’s current financial health score is rated as WEAK, with five analysts recently revising earnings estimates downward for the upcoming period.
Management at PENN acknowledged the slower than desired progress of its ESPN BET platform, stating that it has not yet reached its initial goal of securing a leading market position. They indicated that if significant advancements are not achieved this year, the company will consider revising the Interactive segment’s cost structure.
The firm is also progressing with its physical expansion plans. The new Hollywood Casino (EPA:CASP) Joliet is expected to open in the fourth quarter of 2025, coming in on budget and ahead of schedule. Additionally, PENN’s three other growth projects are reportedly on track to launch in the first half of 2026.
Canaccord Genuity’s analysts underscored the appealing risk/reward profile for investors at PENN’s current valuation. They highlighted that the upcoming land-based growth projects are poised to drive the core regional casino business’s growth, coinciding with the Interactive segment’s move towards sustainable profitability. InvestingPro subscribers can access detailed valuation metrics, including the company’s high EV/EBITDA multiple of 32.05x and comprehensive financial health analysis. Get access to 12+ additional exclusive ProTips and in-depth research reports covering 1,400+ US stocks.
In other recent news, PENN Entertainment reported its fourth-quarter 2024 earnings, which fell short of analysts’ expectations. The company announced an earnings per share (EPS) of -0.44, missing the anticipated -0.29, and reported revenue of $1.4 billion, below the forecasted $1.69 billion. Despite these setbacks, PENN Entertainment remains optimistic about its future, with plans to launch new products and expand its market share in 2025. The company aims to reach breakeven in its digital segment by the end of 2025. PENN Entertainment has also announced its intention to repurchase at least $350 million in shares this year. Analysts from Deutsche Bank (ETR:DBKGn) and other firms have shown interest in the company’s strategic plans, particularly concerning its ESPN partnership and market expansion efforts. The company’s interactive segment reported a notable EBITDA loss, highlighting ongoing challenges. However, PENN Entertainment is optimistic about achieving profitability in its digital segment by the fourth quarter of 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.