Penn Entertainment Sentiment Might Not Get Much Worse

While casino stocks, including those of some regional operators, are performing laudably in 2023, the paired is true of Penn Entertainment (NASDAQ: PENN).

Shares of the largest regional gambling casino operator are shoot down 11.78% year-to-date, patch rivals including Boyd Gaming (NYSE: BYD) and Red Rock Resorts (NASDAQ: RRR) are up an middling of 24%. Sentiment surrounding Penn is dismal, but it’s possible it can’t catch any worse, potentially paving the right smart for a mini-rebound by the beleaguered stock.

In a young written report to clients, Stifel psychoanalyst Steven Wieczynski noted investors may follow pricing in worst grammatical case scenarios with William Penn buy in that power not materialize.

At this point, we believe investors are pricing inwards not only when a meaningful lag in the regional gaming consumer, but also in effect nought (if non negative) course credit for their Interactive business,” wrote the analyst.

He has a “hold” rating on the inventory with a $32 terms target, implying potency upside of 22.13% from today’s close.

Points in Favor of Penn

Penn has been beset by multiple headwinds, including controversies fastened to Barstool Sports founder David Portnoy and his future at the gaming company, investors speculating that there’s next to no more value inwards the company’s digital business, and that consumers are poised to dial plump for visits to regional casinos.

The lastly pointedness is crucial, because land-based casinos are Penn’s nucleus business. While the operator’s inventory execution doesn’t shine it, other data points designate visitation to regional casinos remains strong, and previous fears of a recession seem to follow overblown. The May jobs report confirms as much. Those factors and more could spark renewed involvement inwards Penn shares — something Wieczynski says is happening on an incremental basis.

“We would also highlighting that our call off volumes on PENN experience increased materially over the in conclusion month, which could be a sign that current trading levels are finally starting to projection screen attractive for sure investor groups,” observed the analyst. “First, seems like at that place is little evidence that the regional gaming consumer is pulling back.”

Wieczynski added that another point in time inward favour of William Penn is that the manipulator is significantly less dependant on lower income patrons — the ones to the highest degree likely to melt off disbursement and visitation during a recessional — than it has been in years past. That could designate its client home is improve positioned to atmospheric condition an economical downturn.

Penn Stock Is Cheap

If market place participants aren’t convinced by the aforementioned factors, perhaps Penn’s rock-bottom valuation could follow appealing.

“Management allay sees 2023 direction as conservativist should stream exact levels remain steady,” concludes Wieczynski. “Ultimately, we remain attracted to PENN’s FCF generation and trust that with a long plenty horizon, current trading levels submit an attractive ledger entry point. With shares now trading ~6x earnings, we believe this is a identify investors should be watching.”

Point is with headwinds already priced into the stock, Penn may live too chinchy for some investors to cut at electric current levels.

Join the thousands of happy players at NTC33 - the most popular and trusted online casino platform in Malaysia! Play now and win big. With its seamless gameplay, generous rewards, and a diverse collection of games, NTC33 offers a top-notch casino experience that keeps players coming back for more.