JPMorgan Bullish on Penn Entertainment’s Long-Term Trading Prospects

JPMorgan has shared an optimistic outlook for Penn Entertainment’s stock, expecting it to experience a significant recovery. The favorable forecast was largely due to Penn’s upcoming projects and market presence.

JP Morgan Is Optimistic About the Company’s Trading Future

JPMorgan’s coverage outlined a price target of $24.00 for Penn, expecting it to experience growth of over 40% from its current trading price of $16.86 (as of the time of this writing). Individual analyst targets ranged from a more pessimistic $16 to a highly optimistic $30.

According to JPMorgan, Penn should reach the price target of $24.00 by the end of 2026.

The finance corporation attributed its largely favorable forecast to Penn Entertainment’s “attractive catalyst path,” citing that the company is on the way to opening new projects worth some $1 billion in the next two years alone. JPMorgan analysts predicted that the new venues’ contributions could significantly influence Penn’s revenue.

In addition to benefiting from its new projects, Penn’s market presence is another upside that could help the company create additional shareholder value. JPMorgan also noted that activist investors could likewise be a major shareholder benefit.

Penn’s Experienced Investor Disagreements

Penn’s Q1 results were fairly stable but showed that the company is still struggling to realize its full potential. While the operator’s revenue of $1.67 billion represented an increase, it fell short of the $1.7 billion target. Penn also reported a $0.25 loss per share for the quarter, beating the $0.29 loss forecast. PENN added that it recorded diluted earnings of $0.68 per share, up from a loss of $0.76 per share in Q1 2024.

In its report, Penn said that it benefited from its omnichannel strategy and strong player engagement due to its investment in hospitality and entertainment.

Penn added that it completed a $25 million share buyback, repurchasing 1,413,882 shares of its common stock at an average price of $17.67 apiece. Penn reiterated its goal to repurchase at least $350 million of shares in 2025 alone.

In the meantime, Penn has found itself in hot water amid disagreements with its investors. The battle in question centered on Penn’s annual shareholder meeting on June 17, during which shareholders will elect two members to the company’s board. One of Penn’s biggest investors, HG Vora Capital Management, insists that Penn has wiped out $11 billion in shareholder value.

Following the meeting, shareholders continued to demand course correction.