Stifel: Penn May Be a Winner as Casino M&A Heats Up
Penn Entertainment could benefit from casino industry consolidation, with Stifel analysts suggesting a potential takeover value of $25 per share.Summary
Penn Entertainment (NASDAQ: PENN) is currently up nearly 48% year-to-date and could see further upside as the casino industry consolidates. Stifel analyst Jeffrey Stantial notes that proposed takeovers of Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM) "support a valuation floor" for Penn. Applying Street takeout valuation estimates of 10%-11% free cash flow (FCF) for MGM and 14%-15% for CZR to Penn's FY26E FCF guide suggests a fair value of $20-30/share and $25-37/share looking out to FY27E. While Penn management expressed surprise at the delay in M&A activity, the analyst suggests the operator could benefit by acquiring assets Caesars might divest, though the company's focus is likely on deleveraging. Strategically, management seems interested in expanding back onto the Las Vegas Strip at some point to establish a hub-and-spoke cross-sell strategy with PENN Play Rewards, though they will remain disciplined on price and location/asset.
(Source：Nyt News Today)