Sports betting and casino operator PENN Entertainment PENN is set to report second quarter financial results before the market opens Wednesday.
Here’s a look at the key estimates and details to watch.
Earnings Estimates: PENN Entertainment is expected to report second quarter revenue of $1.67 billion, according to estimates from Benzinga Pro.
The company reported revenue of $1.63 billion in the second quarter of the last fiscal year and revenue of $1.67 billion in the first quarter of the current fiscal year.
PENN Entertainment has beaten analyst revenue estimates in the last nine straight quarters.
Analysts estimate that PENN Entertainment will report earnings per share of 42 cents in the second quarter. The company reported earnings per share of 15 cents in the second quarter of the last fiscal year and 44 cents in the first quarter of the current fiscal year.
PENN Entertainment has missed earnings per share estimates in five of the last seven fiscal quarters.
Ahead of the second quarter earnings report, several analysts have lowered their price targets.
Barclays analyst Brandt Montour has an Overweight rating and lowered the price target from $34 to $33.
Morgan Stanley analyst Dara Mohsenian has an Equal-Weight rating and lowered the price target from $27 to $26.
Key Items to Watch: PENN Entertainment’s second quarter earnings report comes after rival sports betting companies DraftKings Inc DKNG and MGM Resorts International MGM reported strong results and highlighted the improved EBITDA and profitability of their sports betting segments.
During the first quarter, PENN Entertainment's Interactive sports betting unit reported a year-over-year increase in revenue. Overall, company's EBITDA was down 23.6% year-over-year, so investors and analysts are likely looking for an improvement in that line.
PENN completed the acquisition of Barstool Sports in February and raised its full-year guidance to a range of $6.37 billion to $6.81 billion due to the acquisition. Investors are likely to be interested in hearing about an increase in the market share of the Barstool Sportsbook brand.
The company also announced the migration to its proprietary technology platform for Barstool Sportsbook in July. The move is expected to open up more betting options and customization for Barstool Sportsbook and bettors.
“Migrating onto our proprietary technology platform and introducing a fully upgraded Barstool Sportsbook is a milestone achievement,” PENN Entertainment CEO Jay Snowden said. “Having full control of our product and roadmap will lead to improved operational efficiency and the ability to quickly introduce new features, bespoke promotions and wagering markets."
"I want to congratulate our Interactive team members who worked tirelessly to ensure a successful on schedule migration, which better positions us to compete in the online gaming space,” he added.
Discussion surrounding the migration and its effect on EBITDA could be a favorable aspect for the company in the second quarter.
PENN Price Action: Shares of PENN Entertainment have lagged peers over the last year and in the year-to-date period. PENN shares are down 33% in the last year and down 17% year-to-date in 2023.
DraftKings shares are up 74% in the last year and up 191% year-to-date in 2023.
MGM shares are up 32% in the last year and up 37% year-to-date in 2023.
The Roundhill Sports Betting & iGaming ETF BETZ, which tracks the overall sports betting and iGaming sector, has also outperformed PENN. BETZ shares are up 8% in the last year and up 24% year-to-date in 2023.
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