Ahead of the rollout of Barstool Sportsbook in Michigan, this casino gaming stock just got a new bullish initiation.
The Penn National Analyst: Credit Suisse analyst Benjamin Chaiken initiates Penn National Gaming PENN with an Outperform rating and $128 price target.
The Penn National Takeaways: Chaiken highlights four key reasons for the bullish rating:
- Upside from pandemic-related savings and recent acquisitions as the topline returns.
- Upside to targeted cost savings.
- Better than expected margins in sports betting.
- The company’s potential leadership in iGaming.
“We see meaningful opportunities for cost savings from the Pinnacle Entertainment acquisition,” Chaiken wrote in a note. Penn anticipated $120 million in cost synergies from the acquisition.
Related Link: Barstool Sportsbook Inks Deals With Nickmerc, Logan Paul Ahead Of Michigan Launch
The sports betting and iGaming opportunity is another reason for the bullishness from Chaiken.
“We think Penn/Barstool are uniquely positioned to operate their OSB business at higher margins than other operators than other operators," said Chaiken
Penn has a different cost profile as a casino operator with more than 40 properties and the unique ownership structure of Barstool Sports, Chaiken said. The company also has over 20 million Mychoice loyalty members and a dominant physical casino footprint that could help it be a leader in iGaming.
PENN Price Action: Shares of Penn National Gaming are up 6% to $106.43 at publication time.
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