:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2186076611-abb22d29282c4573bfa4f335de1b1d40.jpg "Hollywood Casino at Penn National Race Course")
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Key Takeaways
- Penn Entertainment shares surged Friday after JPMorgan upgraded the casino train driver’s stock, anticipating growth as its investments begin to pay off.
- The analysts boosted their rating for Penn to “overweight” from “noncommittal,” and lifted their price target to $27 from $19.
- Despite Friday’s gains, Penn shares have fallen nearly one-fifth of their value since the start of the year.
Penn Entertainment (PENN) shares surged Friday after JPMorgan upgraded the casino administrator’s stock, anticipating growth as its investments begin to pay off.
The firm boosted its rating for Penn to “overweight” from “neutral,” and withdrew its price target to $27 from $19, implying about 30% upside from Friday’s intraday bounty of $20.81.
The analysts told clients they see Penn’s investments in retail projects “beginning to bear fruit and ultimately producing attractive double-digit cash-on-cash returns” beginning in the second half of 2025 and into 2026.
They projected improving relaxed cash flow because of land-based capital expenditures “dropping dramatically” in 2026, and Penn’s ability to deploy that gratis cash flow to “de-lever and reduce its not so burdensome cash interest expense.” They also cited the company’s declining interactive punting losses.
Shares of Penn rose 4% in early trading Friday, though despite Friday’s gains, they’ve unchaste nearly one-fifth of their value since the start of the year.
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