{"id":323365,"date":"2024-06-21T14:34:20","date_gmt":"2024-06-21T19:34:20","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=323365"},"modified":"2024-06-21T14:34:20","modified_gmt":"2024-06-21T19:34:20","slug":"penn-has-more-challenges-than-rewards-for-boyd-say-analysts","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/","title":{"rendered":"Penn Brings More Headaches Than Perks to Boyd, Scant ESPN Interest, Say Analysts"},"content":{"rendered":"

Shares of Penn Entertainment (NASDAQ: PENN) were pointed lower late Friday after sell-side analysts revealed diverging views on the likelihood of Boyd Gaming (NYSE: BYD) acquiring the regional casino operator.<\/p>\n

\"regional
Boyd Gaming’s Orleans Hotel & Casino. Some analysts still believe the operator is unlikely to acquire rival Penn Entertainment. (Image: YouTube)<\/figcaption><\/figure>\n

Speculation about such a marriage had been percolating for weeks and intensified Thursday amid a reporter that Boyd is engaged in talks with Penn that value the target at more than $9 billion<\/a>, including debt. Neither company has commented on the rumor, but analysts have. For example, Bank of America analyst Shaun Kelley moved Penn to the \u201cno rating\u201d category following news of the rumored Boyd overture.<\/p>\n

\n

In a report to clients, the analyst noted that while buying Penn would be accretive to Boyd, the transaction would require a combination of financing and leverage that could be \u201cunattractive\u201d to the prospective suitor. Assuming the $9 billion figure is accurate, that\u2019s more than Boyd\u2019s enterprise value of roughly $8 billion, meaning the prospective buyer would likely need to issue debt, sell stock, or both to complete the takeover.<\/p>\n<\/div>\n

Additionally, Kelley believes a Boyd takeover of Penn would create some regulatory risk and almost result in asset sales.<\/p>\n

ESPN Bet a Problem, Too<\/h2>\n

Another issue that cannot be overlooked if Boyd is really courting Penn is the existence of ESPN Bet — Penn\u2019s online sports betting mobile application.<\/p>\n

Boyd owns 5% of FanDuel, and outside of its home state of Nevada, the casino operator has been content to enjoy the spoils of FanDuel\u2019s success. Alone, that could be a deterrent to Boyd wanting to bring the scuffling ESPN Bet<\/a> into its fold. Kelley speculated that the presence of ESPN Bet in a takeover of Penn would require a \u201cfurther M&A solution down the road.\u201d<\/p>\n

Said another way, any buyer of Penn would likely divest ESPN Bet. Likewise, Barclays analyst Brandt Montour believes Penn is committed to making ESPN Bet work and might be a reluctant seller of the sports betting business. He also thinks there are more cons than pros for Boyd should it opt to advance negotiations with Penn.<\/strong><\/p>\n

We’re not completely surprised by this report, given this idea has been debated in the investor community for the last couple weeks,” wrote Montour. \u201cWe believe PENN has more confidence in ESPN BET’s ability to gain ground from here, versus what the market expects, and its current share price implies, and we doubt BYD would be interested in giving an optimistic valuation for PENN Interactive or credit shareholders with PENN’s cumulative investment in Digital to-date.\u201d<\/p><\/blockquote>\n

He added that Penn probably isn\u2019t a willing seller<\/a> at the moment and the risk\/reward in buying the company leans more into risk than reward. Montour added that Penn\u2019s relationship with Walt Disney (NYSE: DIS) through ESPN Bet and the gaming company\u2019s obligations to landlords could be deterrents to Boyd.<\/p>\n

A More Constructive View<\/h2>\n

Not all analysts are pessimistic on the idea of Penn being acquired. Craig-Hallum analyst Ryan Sigdahl took the opportunity to lift his price target on Penn to $30 from $20 on the reports suggesting Boyd may be readying an offer.<\/p>\n

\u201cWe think the company\u2019s retail casino assets are worth $30\/share with another $15\/share potential from either M&A or success with ESPN Bet,\u201d observed Sigdahl.<\/p>\n

That combined $45 implies the analyst\u2019s current price target of $30 doesn\u2019t account for ESPN Bet success and that $45 assumption is more than double where Penn trades today. The analyst believes takeover chatter and activist involvement in Penn provide a \u201ccompelling risk\/reward opportunity.\u201d<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of Penn Entertainment (NASDAQ: PENN) were pointed lower late Friday after sell-side analysts revealed diverging views on the likelihood of Boyd Gaming (NYSE: BYD) acquiring the regional casino operator. Speculation about such a marriage had been percolating for weeks and intensified Thursday amid a reporter that Boyd is engaged in talks with Penn that […]<\/p>\n","protected":false},"author":46,"featured_media":262635,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,32093,1,1074],"tags":[81903,81966,81967,80968],"acf":[],"yoast_head":"\nPenn Has More Challenges Than Rewards For Boyd, Say Analysts<\/title>\n<meta name=\"description\" content=\"Penn Brings More Headaches Than Perks to Boyd, Scant ESPN Interest, Say Analysts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Penn Has More Challenges Than Rewards For Boyd, Say Analysts\" \/>\n<meta property=\"og:description\" content=\"Penn Brings More Headaches Than Perks to Boyd, Scant ESPN Interest, Say Analysts.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/\" \/>\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=\"2024-06-21T19:34:20+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/orleans-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1280\" \/>\n\t<meta property=\"og:image:height\" content=\"720\" \/>\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-has-more-challenges-than-rewards-for-boyd-say-analysts\/\",\"url\":\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/\",\"name\":\"Penn Has More Challenges Than Rewards For Boyd, Say Analysts\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/orleans-2.jpg\",\"datePublished\":\"2024-06-21T19:34:20+00:00\",\"dateModified\":\"2024-06-21T19:34:20+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Penn Brings More Headaches Than Perks to Boyd, Scant ESPN Interest, Say Analysts.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/penn-has-more-challenges-than-rewards-for-boyd-say-analysts\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/orleans-2.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/orleans-2.jpg\",\"width\":1280,\"height\":720,\"caption\":\"Boyd Gaming's Orleans Hotel & Casino. 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