4 Reasons To Like Penn National: Cost Savings, Sports Betting Margins And More

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.