Shares of PENN Entertainment ( PENN) ticked 3.7% higher in premarket trading on Tuesday. “Score's success in Ontario also proves a media/OSB strategy can work, and implies Barstool could be more successful under ownership more willing to aggressively invest in U.S.
“Barstool's founder has nonchalantly discussed leaving Barstool in ‘like two years,’ and Portnoy’s departure would increase the pool of partners/buyers,” Engel wrote. The novel is presented as a continuous monologue in which the protagonist Alex Portnoy speaks to his therapist about his difficult relationship with his family, his country, and sex. The upgrade added that Barstool founder David Portnoy leaving the company could assuage concerns from potential acquirers. Portnoy’s Complaint is a 1969 novel by American author Philip Roth. We estimate a transaction could value digital segments at $3.3bn (3.0x 2024E sales, 35x EBITDA), where any proceeds could be used for deleveraging Penn's 4.4x net debt to EBITDAR.” Rather than sit on high-value Barstool/Score assets, we believe management will eventually resort to strategic alternatives.
“PENN's ~9% 2023E FCF yield is comparable to regional gaming peers and implies minimal value for digital segments. “While OSB/iGaming share gains in 2H23 can be a catalyst for PENN, we believe management can unlock value even if Barstool's market share underwhelms,” Engel told clients. Eventually, we believe mgmt will take more aggressive action towards unlocking value, where proceeds could support deleveraging, particularly in a recession. He added that there is significant upside ahead if the company can drive the market to appreciate its Barstool/Score media and iGaming assets. Penn Entertainment ( NASDAQ: PENN) shares popped in premarket trading on Tuesday after Roth MKM pushed its chips in on the name.Įquity analyst Edward Engel said he expects a beat and raise on Thursday when the company is due to post first quarter earnings results.
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