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Penn National a buy under 30?

Updated: Jul 13, 2020

Today I will be breaking down a name that has been thrown into the spotlight. $PENN otherwise known as Penn National Gaming.

Current Price: $29.85

52/Wk High: $40.14

52/Wk Low: $3.75

Read below for the breakdown on $PENN!

Penn National Gaming is a name that has come to fame lately, mostly due to its acquisition of Barstool Sports and its founder Dave Portnoy.

Even though its fame is very much non-stock related, the stock has done quite well. Before we get into the companies stock though I think a brief rundown of the company is needed.

Penn National is a major owner and manager in the gaming, racing, and video gaming operations space. Not only that but with their recent acquisition of Barstool sports for $450 million, the company is quickly growing in the media space as well.

Since the March lows, $PENN has been incredible. From bottoming at just $3.75/share then rallying to a whopping $37/share the stock has been one of the most heavily talked about stocks as of late.

With Casinos reopening, online sports betting growing, and Barstool sports accelerating at a rapid rate, the company has been propelled over the past few months.

Furthermore, just days ago on July first the company reported that 83% of its properties were back up and running, insanely good news for the company.

On the downside, earnings have been negative and the Q1 results were not pretty. Unfortunately, $PENN reported a miss for Q1 with a $-5.26 EPS versus the expected $-5.17 EPS. Revenue also came in low at $1.1 billion.

While earnings were not great they are expected to get better and in the case of further headwinds, Penn National Gaming built a significant cash position. When last reported in March Penn National’s cash on hand position was $731 million.

Earnings were not amazing but the analysts are still very bullish. Currently, the average price target is $31.78/share representing a 6.47% upside. Secondly, the high price target is $45.00/share and low is $22.00.share, so analysts are widespread.

Not only are analysts bullish but the big money is as well on $PENN. Currently, 76.50% of common stock in $PENN is owned by insiders and institutions. Top holders include Baron Capital, Black Rock, and the Carlino Family Trust.

Overall I like $PENN here and think it’s a great opportunity to get in as a mid to long term investment. I find the stock attractive under $30/share. On the other hand, COVID-19 is resurging and that must be seen as a risk.

In short, with the power of Dave Portnoy and his Barstool Sports, casinos reopening, and online sports betting growing, I see a bright future for Penn National Gaming.


Disclaimer: This is not direct financial advice, simply opinion based on independent research.

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