Penn Entertainment Upgraded After Analyst Challenges ESPN Bet's Zero Valuation
Portfolio Pulse from Chris Katje
PENN Entertainment was upgraded from Hold to Buy by Truist analyst Barry Jonas, with a price target of $23, based on the valuation of sportsbook ESPN Bet, launched in November 2023 through a licensing deal with The Walt Disney Company. Jonas believes the market has not assigned any value to ESPN Bet in its valuation of PENN, despite its potential and the value of PENN's other Interactive businesses. The first-quarter results expected on May 2 could surpass low market expectations. PENN's online licenses and iGaming business are also highlighted as valuable assets.
April 23, 2024 | 6:42 pm
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POSITIVE IMPACT
The Walt Disney Company's partnership with PENN Entertainment to launch ESPN Bet in November 2023 could enhance Disney's presence in the sports betting market, potentially impacting its stock positively if the venture proves successful.
Disney's involvement in the sports betting market through its licensing deal with PENN for ESPN Bet represents a new revenue stream and market presence. Success in this venture could positively influence Disney's stock, given the growing market for sports betting and the strength of the ESPN brand.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
PENN Entertainment was upgraded to Buy by Truist, with a price target of $23, based on the undervalued ESPN Bet and the potential of PENN's Interactive businesses. The market's low expectations for Q1 results and the value of PENN's online licenses and iGaming business are also positive indicators.
The upgrade by Truist reflects a positive reassessment of PENN's value, particularly with the launch of ESPN Bet and the potential of its Interactive segment. The analyst's view that the market has undervalued these aspects suggests a bullish outlook for PENN's stock in the short term, especially if Q1 results exceed expectations.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100