Penn National Gaming: Hold Rating Amidst Financial Challenges and Uncertain Market Share Gains

Analyst Stephen Grambling of Morgan Stanley maintained a Hold rating on Penn National Gaming (PENN – Research Report), retaining the price target of $16.50.

Stephen Grambling has given his Hold rating due to a combination of factors impacting Penn National Gaming’s performance. The company’s recent financial results showed a slight miss, with weaker regional revenues and higher corporate expenses contributing to a modest shortfall. Despite some improvements in cost control, the Interactive segment still reported a significant EBITDA loss, which aligns with consensus but highlights ongoing challenges.
Furthermore, while the ESPN Bet business is narrowing its losses, the path to achieving market share gains necessary for positive EBITDA remains uncertain. Investors are likely to focus on strategic actions in the digital space, as the company’s share remains below initial targets. Additionally, there is heightened uncertainty around customer behavior trends and potential impacts from tariffs on future capital expenditures, which contribute to the cautious outlook reflected in the Hold rating.

According to TipRanks, Grambling is a 4-star analyst with an average return of 4.5% and a 57.31% success rate. Grambling covers the Consumer Cyclical sector, focusing on stocks such as Marriott International, DraftKings, and Hyatt Hotels.