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PENN Entertainment (PENN) is reshaping its Illinois footprint as it prepares to close the longtime Hollywood Casino Aurora riverboat and open a new US$360 million land-based complex later in June.
See our latest analysis for PENN Entertainment.
The latest Hollywood Casino Aurora announcement comes after a strong run in PENN Entertainment’s stock, with a 36.8% year to date share price return and a 36.7% 90 day share price return. However, the 5 year total shareholder return is down 74.1%, so recent momentum contrasts with longer term weakness.
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With PENN reporting annual revenue of US$7.07b alongside a loss of US$957.2m, and the stock trading near its analyst price target despite an indicated intrinsic discount, the key question is whether there is still an opportunity for investors to consider here or if the market is already reflecting expectations about its future performance.
Most Popular Narrative: 74.5% Undervalued
According to the most followed narrative, PENN Entertainment’s fair value of $79.65 sits far above the last close at $20.32, putting a spotlight on how harshly the stock has been marked down after years of weak long term returns.
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
This narrative leans on a big shift in profitability, a reset after prior write offs, and a valuation multiple that assumes stronger margins on sizable revenue. It raises questions about what kind of earnings power and cash generation would need to materialize to justify that gap between current price and fair value, and how long the market could take to rerate the stock if those assumptions play out.
Result: Fair Value of $79.65 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
‘ The preceding article may include information circulated by third parties ’
‘ Some details of this article were extracted from the following source finance.yahoo.com ’
