Posted on: September 21, 2020, 11:48h.
Final up to date on: September 21, 2020, 12:08h.
Penn Nationwide Gaming’s (NASDAQ:PENN) first take a look at of its relationship with Barstool Sports activities, that being the Barstool Sportsbook cell software, seems to be going nicely. Wall Street is taking be aware.
The gaming firm launched the extremely anticipated sports activities wagering app throughout its house state of Pennsylvania final Friday – simply in time to seize a weekend chock stuffed with NBA, NCAA soccer, NFL, and U.S. Open motion. It’s only one weekend in a single state, however some Wall Street analysts are enthusiastic in regards to the preliminary response to Barstool Sportsbook.
Though knowledge is proscribed, preliminary metrics are encouraging, because it was the #1 sports activities betting and total sports activities app within the App Retailer for a lot of the weekend,” stated Bank of America analyst Shaun Kelley in a be aware to purchasers at present.
Following a three-day comfortable launch, Barstool Sportsbook turned out there to gamblers throughout the Keystone State on Friday. Underscoring demand for sports activities betting merchandise and the efficiency of the Pennsylvania market, it was only a matter of hours earlier than the wagering platform was the sixth-most downloaded sports activities app within the Apple App Retailer, solely trailing the likes of NFL.com, ESPN.com, and a U.S. Open monitoring providing.
Nonetheless Room to Run for Penn Stock
Penn stock entered Monday with a achieve of 29 p.c over the previous month. However it’s modestly decrease at present, as traders depart gaming stocks amid fears of one other wave of coronavirus instances. Kelley, the Bank of America analyst, stays undaunted in his bull thesis on the title, ratcheting his price goal on the shares to $85, a tie for the best forecast on Wall Street.
“While the stock has had an amazing run, we still like PENN, given its attractive exposure to sports betting/iGaming and an improving core business,” stated the analyst.
There could possibly be one thing to that thesis, as a result of Penn is predicted to roll out Barstool Sportsbook in additional states over the near-term. Then there’s the potential for a political push for the stock, significantly if Louisiana voters and Ohio legislators log off on sports activities betting earlier than the top of the 12 months. These states are marquee markets for Penn Nationwide.
The operator is predicted to roll out the app in different states within the first quarter, leaving it to tussle in Pennsylvania towards rivals resembling BetRivers, DraftKings and FanDuel, amongst others, for the rest of 2020.
Highway to $85
When Penn stock sank beneath $four in March, a return to $15 or $20 appeared implausible. Today, a minimum of three analysts have price goals on the title of $80 or larger, together with the 2 aforementioned $85 forecasts.
With Penn now being a momentum title, it’s not onerous to make a case it could possibly achieve the 23 p.c essential to get to $85.
“Factor in PENN’s leverage, small size, retail base, momentum, and short interest, and it is easier for us to see additional upside. We raise our PO to about 12x EV/EBITDA on 2022E, which on a sum of the parts, implies approximately 8.5x revenue on sports betting/iGaming,” stated Kelley.