Imperial Capital Upgrades Penn National Gaming (PENN) to Outperform on Split-Up Plan

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Imperial Capital upgraded Penn National Gaming (NASDAQ: PENN) from In-Line to Outperform with a price target of $60.00 (from $47.00) following move to split company and convert to REIT.

The firm comments, "We view the company’s announcement as a positive for the PENN stock. After the spin-off of its real estate assets and the subsequent sale-lease-back, Penn National (OpCo) will be a management company with 5.5x total leverage. We think the remaining shares could be worth around $5, based on a 6.5x valuation multiple, as shown in Figure 5. We think the spun-off REIT shares (PropCo) could be worth around $55 per share based on a 3.4% dividend yield (plus 25% premium yield over the industry average). That leads to a combined value of $60 per share for the PENN common shares."

For an analyst ratings summary and ratings history on Penn National Gaming click here. For more ratings news on Penn National Gaming click here.

Shares of Penn National Gaming closed at $37.61 yesterday, with a 52 week range of $33.62-$46.55.

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