Analyst Jeffrey Stantial from Stifel Nicolaus maintained a Hold rating on PENN Entertainment and keeping the price target at $19.00.
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Jeffrey Stantial has given his Hold rating due to a combination of factors influencing PENN Entertainment’s current market position. One of the primary considerations is the mixed outlook on PENN’s Online Sports Betting (OSB) segment, where recent trends suggest a potential end to the ESPN Bet partnership. This partnership’s possible termination could remove a significant uncertainty, allowing investors to focus more on PENN’s core Retail and iCasino businesses, which have shown promising growth and solid performance.
Additionally, while PENN’s regional Gaming Gross Revenue (GGR) remains healthy, there are concerns about increased competition and the impact of new market entrants. Despite these challenges, the company has demonstrated resilience, particularly with the successful launch of the Joliet boat-to-land project, which exceeded initial expectations. However, macroeconomic uncertainties and the timing of strategic decisions contribute to a cautious outlook, justifying the Hold rating as the company navigates these complex dynamics.