Mizuho raises PENN stock price target to $25, maintains Outperform

On Tuesday, Mizuho (NYSE:MFG) Securities displayed confidence in PENN Entertainment Inc (NASDAQ:PENN), with analyst Ben Chaiken increasing the company’s price target to $25 from the previous $24. Currently trading at $20.76, PENN shows significant volatility with a beta of 2.19. The firm continues to endorse PENN with an Outperform rating, signaling optimism for the company’s future performance. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model.

Chaiken’s analysis highlights several key factors contributing to the positive outlook for PENN Entertainment. The company’s February operations, excluding weather impacts, showed strength, despite an overall weak financial health score as indicated by InvestingPro data. With revenue of $6.58 billion and modest growth of 3.38% over the last twelve months, the company faces challenges. Additionally, the anticipation of new asset openings, such as the one in Joliet scheduled for the fourth quarter of 2025, is expected to drive revisions in the company’s 2026 estimates.

PENN’s strategic focus on its standalone iGaming application is particularly notable. The app is considered the most interesting and untapped segment of PENN’s business at present. This emphasis on digital expansion is in line with current industry trends towards online gaming and betting platforms.

The analyst also points to robust trends in the Canadian market, where PENN is poised to benefit from the upcoming launch in Alberta in the near to medium term. This expansion in Canada could serve as a catalyst for the company’s growth.

Management’s adaptability is another positive sign, as indicated by their readiness to reconsider or scale back the ESPN BET platform if market share trends do not align with expectations. This willingness to pivot based on market feedback demonstrates a proactive approach to business strategy.

Mizuho’s revised price target and sustained Outperform rating reflect confidence that these strategic initiatives and market opportunities will contribute to PENN Entertainment’s continued success and growth in the gaming and entertainment sector.

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 forecasted -0.29, and revenue was reported at $1.4 billion, below the anticipated $1.69 billion. Despite this, PENN has announced a $350 million share buyback program, indicating management’s confidence in the company’s future. Benchmark analysts maintained a Hold rating on PENN, citing challenges in the Interactive segment, particularly with ESPN BET, though the Hollywood iCasino showed promising results. Needham analysts lowered their price target for PENN to $25, maintaining a Buy rating, and noted the potential for PENN to leverage its partnership with Disney (NYSE:DIS) to enhance the ESPN BET platform. Stifel analysts increased their price target to $22, retaining a Hold rating, and highlighted the company’s fiscal year 2025 guidance for retail revenue aligning with forecasts. Canaccord Genuity maintained a Buy rating with a $28 price target, acknowledging the company’s solid fourth-quarter results and upcoming land-based growth projects. Investors will be closely monitoring PENN’s strategic initiatives and partnerships, as the company aims to improve its financial performance and market position.

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