Morgan Stanley Maintains Overweight on Penn National Gaming

Morgan Stanley is out with its report today on Penn National Gaming PENN, maintaining Overweight. In a note to clients, Morgan Stanley writes, "We believe the revised casino-development agreement between PENN's lone competitor and the state of Ohio has largely positive implications for PENN. We believe the revised deal, which increases license fees but permits slots at racetracks, would be a net positive for PENN (+$1-2 per share), assuming a similar agreement with PENN. This legislative action should provide a compelling buying opportunity, as consensus EBITDA estimates for PENN's OH properties remain 100% too low (even factoring in the increases license fees), in our view, setting the stage for positive estimate revisions in 2H11 and 2012." At the time of posting, shares of PENN were trading at $38, up 1.28% from Wednesday's close.