PENN Entertainment's Product Enhancements And ESPN Integration Could Spark 2025 Growth, Says Analyst

Needham analyst Bernie McTernan expressed his view on PENN Entertainment, Inc. PENN investor event in Las Vegas on Monday.

At the event, Penn said it expects third-quarter retail operations adjusted EBITDAR to be in the range of $465 million to $475 million. The company also raised its interactive adjusted EBITDA guidance for the third quarter.

Penn anticipates a loss of $90 million to $100 million, up from prior guidance for a loss of $115 million to $135 million. The company noted that improving products and lower promotional expenses accounted for the upside.

The analyst writes that the key takeaway is the YoY improvement in PENN’s parlay mix, which is boosting hold due to recent product updates.

Strong Ontario results highlight potential upside from the convergence of sports betting and media, adds the analyst.

McTernan anticipates the account linking with ESPN in November could be a significant growth driver, leveraging ESPN’s vast user data to lower customer acquisition costs and boost retention and engagement.

PENN’s third-quarter preliminary results show lower Property Adjusted EBITDAR but a reduced expected loss for Interactive operations, adds the analyst.

The analyst says that the 2025 estimates for Interactive EBITDA are better than the consensus but slightly below their forecast, while 2026 expectations align with their projections.

The analyst reiterated a Buy rating and maintained a price target of $26.

Price Action: PENN shares are up 1.21% at $18.80 at the last check Tuesday.

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