Analyst Reset On PENN Entertainment (PENN) Prompts Fresh Look At Valuation And Potential Upside

Analyst sentiment shift puts PENN Entertainment (PENN) under closer investor scrutiny

Recent analyst updates on PENN Entertainment (PENN), including lower expectations and revised recommendations, have put the casino and online betting operator back in focus for investors assessing risk, reward, and timing.

See our latest analysis for PENN Entertainment.

PENN Entertainment’s recent analyst reset comes after a choppy stretch, with a 1-day share price return of 4.32% at US$13.04 contrasting with a 30-day share price return decline of 13.87% and a 1-year total shareholder return loss of 37.49%. This suggests momentum has been fading rather than building.

If this kind of volatility has you looking beyond casinos and betting, it could be a good moment to broaden your watchlist with fast growing stocks with high insider ownership.

With PENN shares down sharply over 1 and 5 years, yet trading at a sizable discount to the average analyst target and some intrinsic estimates, you have to ask: is there real upside left here, or is the market already pricing in whatever growth lies ahead?

Most Popular Narrative: 29.9% Undervalued

At $13.04 versus a most followed fair value of $18.61, the PENN narrative centers on whether a discounted share price lines up with its long term plan.

The upcoming ramp up and margin accretion from four new or relocated, efficiency focused retail projects, along with property level investments in non gaming amenities and partnerships (e.g., hotel and golf entertainment), will combine to offset headwinds from new supply, drive higher per guest spend, and support long term EBITDA expansion and margin improvement.

Read the complete narrative.

Want the full story behind that fair value gap? Revenue estimates, margin rebuild, and a different earnings multiple are all doing heavy lifting here.

Result: Fair Value of $18.61 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story could change quickly if the loss making interactive division drags on longer than analysts expect, or if higher taxes continue to squeeze casino profitability.

Find out about the key risks to this PENN Entertainment narrative.

Build Your Own PENN Entertainment Narrative

If you see the numbers differently or prefer to test your own assumptions, you can build a complete PENN thesis yourself in just a few minutes, starting with Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding PENN Entertainment.

Looking for more investment ideas beyond PENN?

If PENN has your attention, do not stop there. Use the same disciplined mindset to hunt for other opportunities before the next set of stories takes off.

• Target potential mispricings by scanning these 862 undervalued stocks based on cash flows that might not yet be on everyone’s radar.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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