PENN Entertainment rallies after bull call from J.P. Morgan

PENN Entertainment (NASDAQ:PENN) rallied in early trading on Friday after J.P. Morgan upgraded the casino stock to an Overweight rating after having it slotted at Neutral.

Analyst Joseph Greff and his team see a favorable risk-reward, with sight line to a bottoming of PENN’s regional land-based-casino cash flow generation. The firm also sees a path to aggregate growth given the $850 million of investments into PENN’s four retail growth projects, which were noted to be beginning to bear fruit and ultimately generating attractive double-digit cash-on-cash returns.

J.P. Morgan also sees reasonable set expectations for near-term Interactive segment losses for the Q4 and 2025.

In terms of valuation, J.P. Morgan has a year-end 2025 price target of $27 based on a lease adjusted EV/EBITDAR sum of the parts approach, where the firm ascribed a 7.0X target EBITDAR multiple on its 2026 land-based casino forecasts and a 10xXtarget multiple on our 2026 $80 million Interactive multiple.

Shares of PENN Entertainment (PENN) were up 4.40% in early trading on Friday.