{"id":144254,"date":"2020-08-09T13:07:12","date_gmt":"2020-08-09T20:07:12","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=144254"},"modified":"2020-08-10T13:20:00","modified_gmt":"2020-08-10T20:20:00","slug":"penn-stock-risk-reward-isnt-all-that-exciting-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/","title":{"rendered":"Penn National Is Sizzling, But Analyst Sees Unfavorable Near-Term Risk\/Reward"},"content":{"rendered":"

On the back of a decent second-quarter earnings report delivered last week, and favorable comments from management on July and August booking trends, Penn National Gaming (NASDAQ: PENN) notched a jaw-dropping weekly gain of almost 45 percent.<\/p>\n

\"Penn
Barstool Sports founder David Portnoy, seen here following a recent interview with President Trump, is still a catalyst for Penn National stock. But one analyst says risk\/reward on the name isn’t great. (Image: Boston Globe<\/em>)<\/figcaption><\/figure>\n

As impressive as that it is, a run like that in a short time frame can give some analysts pause. For example, Wolfe Research analyst Jared Shojaian now sees a lack of excitement in the risk\/reward profile on Penn stock.<\/p>\n

We raise estimates, as regional trends have been better than expected throughout this earnings season,\u201d said the analyst. \u201cStill, even if we give ~$23 a share for the Barstool opportunity, then the remaining Op-Co is still trading at ~7.3x our 2021 enterprise value\/earnings before interest, taxes, depreciation, amortization, and restructuring or rent costs (<\/span>EBITDAR), which isn’t exciting to us in this still highly uncertain (sector), while Penn no longer owns any assets.\u201d<\/p><\/blockquote>\n

In non-analyst speak, Penn’s 36 percent stake in Barstool Sports<\/i> remains compelling<\/a>, particularly with the domestic sports calendar getting back to normal. But the company doesn’t have much left in the way of real estate<\/a> to sell to raise capital if needed.<\/strong><\/p>\n

Investors Cheer Barstool<\/h2>\n

Penn reported its June quarter numbers on Aug. 6, and over the last two days of the week, the stock soared almost 24 percent, punctuated by an 11.72 percent jump last Friday on above-average volume.<\/p>\n

\n

Some of the fuel for that fire came by way of management comments that the much-ballyhooed Barstool Sports<\/i> betting app will, as expected, be ready for football season<\/a>. The company also noted that while its online casinos business is gaining momentum, it’s not doing so at the expense of land-based gaming venues in its home state of Pennsylvania.<\/p>\n<\/div>\n

\u201cThe launch of the app is on track for initial roll out in September, and is expected to be fully rolled out to all states by 1Q21,\u201d said Shojaian. \u201cIt’s seemingly becoming the common trend that when PENN management speaks, especially on sports\/iGaming, the stock goes up.\u201d<\/p>\n

However, there are vulnerabilities for Penn and other equities levered to the sports trade. The 2020 college football season increasingly appears to be on the brink because of COVID-19. Last week, the University of Connecticut canceled its season, becoming the first FBS program to do so.<\/p>\n

On Saturday, the Mid-American Conference (MAC) — a favorite of bettors because of the league’s mid-week games and often high-scoring affairs — followed suit<\/strong>.<\/p>\n

Regional Strength<\/h2>\n

Penn echoed sentiments from many of its rivals that already stepped into the earnings confessional, highlighting strength in its regional gaming portfolio during the June quarter.<\/p>\n

Shojaian notes the operator’s venues that reopened in May, including Southern properties, are performing the best, and that the company can get reach 2019 EBITDAR levels on 90 percent of that year’s revenue, an improvement over a prior forecast of 95 percent.<\/p>\n

The analyst has a \u201cpeer perform\u201d rating on the stock, which is up more than 1,200 percent from its March lows<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

On the back of a decent second-quarter earnings report delivered last week, and favorable comments from management on July and August booking trends, Penn National Gaming (NASDAQ: PENN) notched a jaw-dropping weekly gain of almost 45 percent. As impressive as that it is, a run like that in a short time frame can give some […]<\/p>\n","protected":false},"author":46,"featured_media":144256,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[],"acf":[],"yoast_head":"\nPenn Stock Risk\/Reward Isn't All That Exciting, Says Analyst<\/title>\n<meta name=\"description\" content=\"Penn National Gaming stock is on fire, but one analyst says the recent rally is weighing on the risk\/reward profile for the worse.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Penn Stock Risk\/Reward Isn't All That Exciting, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"Penn National Gaming stock is on fire, but one analyst says the recent rally is weighing on the risk\/reward profile for the worse.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-08-09T20:07:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-10T20:20:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dp.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1440\" \/>\n\t<meta property=\"og:image:height\" content=\"1129\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/\",\"name\":\"Penn Stock Risk\/Reward Isn't All That Exciting, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dp.jpg\",\"datePublished\":\"2020-08-09T20:07:12+00:00\",\"dateModified\":\"2020-08-10T20:20:00+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Penn National Gaming stock is on fire, but one analyst says the recent rally is weighing on the risk\/reward profile for the worse.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/penn-stock-risk-reward-isnt-all-that-exciting-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dp.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dp.jpg\",\"width\":1440,\"height\":1129,\"caption\":\"Barstool Sports founder David Portnoy, seen here following a recent interview with President Trump, is still a catalyst for Penn National stock, but one analyst says risk\/reward on the name isn't great. 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