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Index moves and a new Illinois casino put PENN in focus
PENN Entertainment (PENN) has just opened its US$360 million Hollywood Casino and Hotel Aurora in Illinois, while also moving from the Russell 1000 family into several Russell 2000 indices
The recent opening of Hollywood Casino and Hotel Aurora and PENN Entertainment’s move into several Russell 2000 indices comes alongside a 50.17% 3 month share price return and a 19.13% 1 year total shareholder return, suggesting momentum has picked up after weaker multi year performance
If this kind of index reshuffling has your attention, it could be a good moment to look beyond casinos and check out 20 top founder-led companies
With PENN Entertainment trading close to the average analyst price target but screening with a relatively high intrinsic discount and value score, is the recent rally a reset from pessimism, or is the market already pricing in future growth?
Most Popular Narrative: 72.4% Undervalued
Against PENN Entertainment’s last close of $22.02, the most followed narrative on Simply Wall St points to a fair value of $79.65, implying a large gap between market price and narrative valuation
PENN’s stock has been a disaster for years. EV is way down. With fundamentals of its casinos solid, write offs of mistakes behind them, and valuation at a nadir, the opportunity for a major upside breakout is apparent. The Company is sizable , $7 billion in revenues and $1.7 billion in EBITDAR, its not going away. In fact, a hostile bid or management takedown is not impossible. Assets are top notch, even if management is not. Expect a major upswing in earnings in 2026 with an accompanying share price rise. I place fair value at about $30 per share……..That would be 7 times 2027 EBITDA to Enterprise Value
According to Frosty555, this PENN Entertainment narrative leans heavily on a rebound in profitability, firmer margins and a richer future earnings multiple to justify that higher fair value, but the exact path from losses today to those projected cash flows is where the real story sits
Result: Fair Value of $79.65 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts
However, PENN Entertainment is still reporting a net loss and relies heavily on interactive and regional casino earnings. Softer demand or regulatory shifts could challenge this rebound story
Find out about the key risks to this PENN Entertainment narrative
Next Steps
If the PENN Entertainment story so far feels optimistic, it makes sense to move quickly and test that sentiment against the underlying numbers yourself using the 3 key rewards
Looking for more investment ideas beyond PENN Entertainment?
If PENN Entertainment has sharpened your focus, do not stop here. Broaden your watchlist and compare it against other opportunities that might better match your goals
- Zero in on potential upside by scanning 44 high quality undervalued stocks that currently look mispriced relative to their fundamentals.
- Prioritize resilience and sleep better at night by checking 74 resilient stocks with low risk scores with more modest risk profiles.
- Chase under-the-radar potential by reviewing our screener containing 18 high quality undiscovered gems before the crowd catches on.
This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.
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Have feedback on this article? Concerned about the content? Get in touch with us directly.Alternatively, email editorial-team@simplywallst.com
About NasdaqGS:PENN
PENN Entertainment
Provides integrated entertainment, sports content, and casino gaming experiences in the United States and internationally
See The Free Research Report
Undervalued with moderate growth potential
See The Free Research Report
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