Jefferies analysts downgrade PENNY Entertainment

Jefferies analysts downgrade PENNY Entertainment

By Kristina Sobol

Budrigannews.com – PENN Entertainment Inc. (NASDAQ:) was downgraded by Jefferies analysts. to Hold from Buy, lowering the stock’s price target from $50 per share to $35 in a note to clients.

Investors were informed by analysts that the company’s decision to revise its rating was primarily based on a shift in its preference for Las Vegas operators and “clear growth stories,” as it anticipates moderate growth or modest decline across regional markets.

The analysts wrote, “Despite the company’s announcement of multiple capital projects in Illinois, Ohio, and Nevada, construction will not begin until late 2023.” Therefore, we are not modeling any earnings contributions from these projects for the time being through 2024.”

While Jefferies sees significant upside in the sports and digital wagering business’s valuation, they also see “some execution risks, which will remain an overhang through most of the year” in the US’s planned transition off of a third-party player account management and trading platform simultaneously.

“Because we anticipate a modest impact from the snow storm in the Midwest toward the end of 2022, we are slightly lowering our estimates for 4Q22.” In the meantime, we are lowering our FY23 revenue and adj estimates to $6.351 billion and $1.932 billion, respectively.

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EBITDAR has been increased from $6.380 billion and $1.947 billion in the past to reflect our revised macro view, which predicts a recession beginning in the second and third quarters of this year. Last but not least, we are lowering our FY24 revenue and adjusted estimates to $1.936 billion from $6.358 billion. EBITDAR from $6.385 billion and $1.950 billion,” the analysts confirmed.