#4 - Penn National Gaming (NASDAQ:PENN)
If this were a “normal” economic downturn, investors would better understand the demand for casinos. But with casinos beginning to come online, Penn National Gaming (NASDAQ:PENN) should be able to continue its recent run.
Penn takes an asset-light approach that makes it more like a real estate investment trust (REIT) than a casino. The company has $8.5 billion of lease liabilities. The company has $900 million of lease payments (about 10%) due in 2020. This makes it critical for Penn to start seeing traffic, and revenue, return to casinos.
However, like many gambling stocks, Penn is not completely reliant on casino operations. The company also has a 36% stake in Barstool Sports. Barstool is a leading digital sports media company, and the deal that Penn struck with them makes Penn its exclusive gaming partner for up to 40 years. And that means Penn can use the Barstool brand to help market its own online and retail sports betting and iCasino products.
Having live sports coming back should be a catalyst for getting this revenue stream flowing.
And Penn has properties throughout the United States. This means that even if pockets of the virus return, the company should keep some properties open even if others have to close or remain closed.
About PENN Entertainment
PENN Entertainment, Inc, together with its subsidiaries, provides integrated entertainment, sports content, and casino gaming experiences. The company operates through five segments: Northeast, South, West, Midwest, and Interactive. It operates online sports betting in various jurisdictions; and iCasino under Hollywood Casino, L'Auberge, ESPN BET, and theScore Bet Sportsbook and Casino brands.
Read More - Current Price
- $19.45
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 8 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $22.96 (18.1% Upside)
