PENN Entertainment Inc (PENN)

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Big news today!

CFRA LIFTS OPINION ON SHARES OF PENN NATIONAL GAMING, INC. TO BUY FROM HOLD
Today 3:12 PM ET (CFRA)Print
PENN's reports strong 2Q results (GAAP EPS of $1.17 beat by $0.21), highlighted by profitable reopening. EBITDAR of $587M increased 31% from 1Q and 38% from 2Q 2019 (pre-pandemic). EBITDAR margins nearly hit 38% (+400 bps from 2Q 2019). PENN also announced the acquisition of theScore, a leading digital media and sports betting company with strong in-house technology, for about $2B in cash and stock. theScore is the number 1 sports app in Canada and number 3 in North America, with a large and loyal customer base. We think this deal makes strategic sense as it complements Barstool Sports and helps PENN build a more complete sports media ecosystem, integrating sports, media, gaming, and technology to create multiple avenues for growth. This deal also helps PENN vertically integrate its tech stack, which we think could create structural advantages over time. We raise our 12-month target to $87 from $83 using a 2022 EV/EBITDA multiple of 10.5x. Our 2021 EPS goes to $3.60 from $2.43 and 2022's to $3.06 from $2.58.