Deutsche Bank Upgrade Positions Penn Entertainment on Regional Casino Fundamentals
Penn Entertainment stock rose 5.4% to $15.91 after Deutsche Bank upgraded it to buy with a $25 target. The analyst cited improving regional casino trends, investment returns at multiple properties, and calendar tailwinds. This follows the end of Penn’s Barstool and ESPN Bet online ventures.
SCCG Take — Regional casino stability allows operators to de-emphasize digital sports betting volatility. Investors gain a clearer line of sight into core earnings drivers ahead of the Nov. 5 report.
Penn Entertainment shares rose 5.4% to close at $15.91 on Tuesday after Deutsche Bank upgraded the operator to buy from hold. Analyst Carlo Santarelli lifted the price target to $25 from $23, citing stable regional gaming fundamentals and dismissing recent weakness as macro-driven. The new target implies roughly 66% upside from the prevailing share price at publication, as reported by Legal Sports Report.
Shares had declined roughly 33% over the past three months against a 3% gain for the S&P 500. Santarelli increased adjusted EBITDAR estimates by about 2% despite the prior selloff.
Regional Casino Portfolio Drives Revised Forecasts
Deutsche Bank’s third-quarter adjusted EBITDAR forecast sits 1.9% above consensus. Higher expectations for Midwest and Northeast segments anchor the projection. Calendar quirks produced a 2.5 percentage point headwind to August gross gaming revenue from one fewer Friday and the Labor Day shift. September delivered a 0.4 percentage point tailwind as those effects reversed, with October projected to add 2.4 percentage points.
Santarelli pointed to encouraging early returns from investments at Aurora, Joliet, Columbus and M Resort. The pipeline includes Hollywood Casino Council Bluffs as a further contributor to earnings growth.
Online Sports Betting Transition Reduces Visibility on Digital Assets
The upgrade follows Penn Entertainment’s exit from two costly online sports betting initiatives. The operator acquired Barstool Sports for $551 million before selling it back to founder Dave Portnoy for $1 in 2023. A 10-year ESPN Bet agreement that required $150 million in annual payments plus stock warrants ended in December after the app missed market share targets.
Penn Entertainment now operates theScore Bet in the U.S. and signed a multiyear NFL sports betting and online casino partnership in Canada earlier this month. Third-quarter earnings arrive Nov. 5. Santarelli wrote that the recent selloff stemmed more from macro concerns and risk-off sentiment than from any meaningful deterioration in company-specific fundamentals.
Reporting: Legal Sports Report
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
Gaming, betting and prediction markets — the desk’s read, every weekday.
Subscribe →