PENN Entertainment stock rating reiterated at Market Outperform by JMP

Investing.com - JMP Securities has reiterated its Market Outperform rating for PENN Entertainment Inc (NASDAQ:PENN) with a price target of $25.00, according to a research note released Tuesday. Currently trading at $18.83, with a market capitalization of $2.65 billion, PENN’s stock appears fairly valued according to InvestingPro Fair Value analysis.

JMP analyst Jordan Bender maintained the rating while noting PENN trades at "5.9x 2027E EBITDA vs. LT average of 7.0x," suggesting the stock is currently undervalued compared to its historical trading range. InvestingPro data shows the company operating with a significant debt burden, reflected in a debt-to-equity ratio of 3.71 and current ratio of 0.79.

The firm identified several potential catalysts for PENN in the coming quarters, including "project returns, capital allocation, and an exit of ESPN Bet," which could drive share price appreciation.

JMP slightly adjusted its EBITDAR estimates for PENN to "$1,554M/$1,801M/$1,913M" for 2025-2027, down from previous estimates of "$1,554M/$1,833M/$1,958M," reflecting a modest reduction in projected earnings.

The $25 price target is based on a multiple of "5.5x (from 5.2x)" of JMP’s 2027 estimated EBITDA and "8.5x" of projected free cash flow for 2026-2027, according to the research note.

In other recent news, PENN Entertainment reported its second-quarter 2025 financial results, revealing revenue of $1.765 billion, which surpassed the consensus estimate of $1.730 billion. However, the company’s adjusted EBITDAR came in at $392.1 million, slightly below the expected $392.8 million. Needham has lowered its price target for PENN Entertainment to $22.00, down from $25.00, due to weaker-than-anticipated interactive handle trends, while maintaining a Buy rating. Additionally, Morgan Stanley reiterated an Equalweight rating with a $17.00 price target after attending a company event showcasing new casino projects in Illinois. Stifel also maintained its Hold rating and $19.00 price target following a tour of PENN’s recently opened Hollywood Joliet casino and the upcoming Aurora project. Benchmark continued its Hold rating on the stock following the mixed financial results. Meanwhile, ESPN is set to launch a redesigned app next week, which will prominently feature betting options, including an ESPN Bet tab, as revealed during a company-wide town hall. These developments reflect ongoing strategic moves and analyst perspectives on PENN Entertainment’s performance and future.

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