Morgan Stanley Discusses Earnings At Penn National Gaming (PENN)

Morgan Stanley is out with a research report on Penn National Gaming PENN after it reported earnings. It has an Overweight rating on shares. In a note to investors, Morgan Stanley writes, "PENN reported net revenue and Adjusted EBITDA results above our and consensus estimates. Adjusted EBITDA of $178 mn (vs. MS $170 mn) and margins of 26.7% (vs. MS 25.7%) beat our estimates, both of which were above consensus ($169 mn / 25.5%). The company raised FY guidance and set 2Q EBITDA guidance 6% above current consensus. PENN remains best in class (and among the cheapest) of the regionals and continues to manage effectively through the current challenges, in our view. Unlike other regional operators, we expect PENN to continue to generate positive y-o-y EBITDA growth in 1H11 due to the contributions from its staggered development pipeline. We see the potential for positive estimate revisions over the next 12-18 months due to the Street's fundamental mis-modeling of PENN's growth pipeline." Shares of PENN are up $2.66 to $40.00, a gain of 7.1% on 1.5 million shares.