Must-know: Wall Street Analysts’ outlook for Penn National Gaming

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Updated

Positive outlook

Penn National Gaming, Inc.’s (PENN) 52-week low is $10.07, while its 52-week high is $15.50. The company’s stock has a 50-day moving average of $11.49 and a 200-day moving average of $11.72. The company’s market cap is ~$990 million.

PENN reported $0.10 earnings per share (or EPS) for the quarter, beating the consensus estimate of $0.06 by $0.04. The company reported net revenues of $646 million for Q3 2014, while the consensus estimate was $634 million.

Part 13

The above chart shows the 12-month price targets of the brokers that have rated PENN’s shares since the release of Q3 2014 results. Nomura gave a neutral rating on PENN’s shares with a target price of $12. Both Barclays and Deutsche Bank gave buy ratings with a target price of $15.

Credit Suisse reiterated an outperform rating with a target price revised upward to $15 from $14. Similarly, Stifel Nicolaus reiterated a buy rating on PENN’s shares with a target price upgraded to $15 from $14.

In contrast, Imperial Capital downgraded the target price to $17 from $20 with an outperform rating on the stock. Similarly, Susquehanna cut its price target from $16 to $13 with a positive rating on PENN’s shares.

In total, the mean target price from all these brokers displays an upside of 10%.

Some of these brokers rated other casino companies including Las Vegas Sands Corp. (LVS), Wynn Resorts, Limited (WYNN), and MGM Resorts International (MGM) after respective Q3 2014 results were announced.

Investors looking to add these companies in their portfolio may choose to invest in and ETF such as the Consumer Discretionary Select Sector SPDR Fund (XLY).

Broker comments

“The stronger than expected quarter appears, to us, to be more a function of managing very well in a tough environment versus the regional environment getting marginally better,” said an analyst at JP Morgan.

“Penn has the strongest growth pipeline in the industry,” said an analyst at Macquarie.

To learn more about the industry, including business models and fundamentals, visit Market Realist’s Casinos & Gaming page.

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