Craig-Hallum Upgrades Penn National Gaming (PENN) to Buy, 'M&A Interest, Activist Involvement'

Craig-Hallum analyst Ryan Sigdahl upgraded Penn National Gaming (NASDAQ: PENN) from Hold to Buy with a price target of $30.00.

The analyst comments "While we have been critical of capital allocation and overpromising/underdelivering in Interactive (see our 8/10/23 downgrade – S&P is +22% since vs PENN -26%), we have always argued there were highly valuable assets and significant stock upside potential. With investor sentiment low, more Hold than Buy ratings by analysts, and an industrylow valuation multiple (despite industry-leady retail casinos & structural advantages online), we think this presents a compelling risk/reward opportunity and recent activist involvement and M&A rumors providing a floor on valuation. We think the company’s retail casino assets are worth $30/share with another $15/share potential from either M&A or success with ESPN Bet. There are a steady cadence of potential fundamental catalysts including ESPN Bet product improvements/integrations (see page 2), completion of its four retail growth projects in ‘24/’25 meaningfully reducing CapEx in 2026+, and ultimately a company that can generate $1B+ of FCF in 2026."

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 $20.04 yesterday.

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