Penn National Gaming Reaffirms Guidance; Deutsche Bank Still Likes Stock

• Penn National Gaming, Inc PENN shares have appreciated 18.21 percent year to date, from a low of $13.21 on January 6.
• Deutsche Bank’s Carlo Santarelli has maintained a Buy rating on the company, with a price target of $25.
• In a press release on December 30, the company reaffirmed its guidance for 4Q15.

According to the Deutsche Bank report, “Despite some weather related concerns in December and a calendar hampered November, PENN reiterated its net revenue guidance of $722.5 mm and its adjusted EBITDA guidance of $181.6 mm.”

The revenue and EBITDA guidance is now marginally below the estimates and the consensus expectations.

Analyst Carlo Santarelli expects the removal of the EPS risk to be favorable for the shares, “as we transition into the New Year and face more challenging comparisons given favorable 1Q15 weather.”

Penn National also mentioned in its December 30 press release that it expected to submit its restated financials by February 29, 2016.

The company expects to modify its financials for 2013 and 2014 to show “1) fees for the OH track relocations will be treated as indefinite lived intangible assets rather than depreciating assets and 2) Hollywood Baton Rouge and Hollywood Perryville will be restated as discontinued operations for those years,” Santarelli stated.

Management expects liability from lease reclassification to amount to $3.58 billion. Penn National was not in compliance with NASDAQ regulations as of November 13, 2015, since it was unable to file its 10Q within the deadline for the period ended September 30, 2015.

“PENN noted that it would submit a plan to reestablish compliance by January 8, 2016. The plan should extend compliance by 180 days,’ the report added.

The company is also in discussions with its senior credit facility lenders for additional extension for these financials.