- Shares of
Penn National Gaming are set to continue benefiting from the "Portnoy momentum trade" as sports-betting euphoria extends into the fall football season, Stifel said on Wednesday. - "The recent launch of the
Barstool Sportsbook app coupled with other sports betting 'announcements' should allow the shares to continue riding the sports betting euphoria wave higher," Stifel said. Penn National has rallied 165% year-to-date, vastly outperforming the S&P 500's year-to-date return of 5% through Wednesday.- Stifel expects shares of Penn National to hit $85, representing potential upside of 25% from Wednesday's close.
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The "Portnoy momentum trade" that has helped shares of Penn National Gaming surge more than 165% year-to-date is set to continue as "sports-betting euphoria" extends into the fall, Stifel said in a note on Wednesday.
Penn National acquired a stake in and partnered with
"The recent launch of the Barstool Sportsbook app coupled with other sports betting 'announcements' should allow the shares to continue riding the sports betting euphoria wave higher," Stifel said.
Stifel said that it saw "considerable momentum" building in all of Penn National's business segments and that its previous estimates of the company's long-term potential "were way too conservative and needed to be revised higher."
Stifel said its new estimates drove its decision to raise its price target on Penn National to $85 from $47, representing potential upside of 25% from Wednesday's close.
Besides raising its estimates, Stifel speculated that the momentum trade behind Penn National could continue given the real long-term potential of online sports betting.
"Here's the thing: nobody is going to be proven right or wrong about the size/profitability of those segments [of sports betting] for years to come, given those
The upside is that many states have yet to legalize sports betting, and the COVID-19 pandemic could be the catalyst that gets them to do so, Stifel said.
"Given the ongoing pandemic and the fact many states are hurting for tax dollars, we believe there could be up to 10 states that could fast track or formally pass sports betting/iGaming legislation come this November," Stifel said.
Shares of Penn National jumped as much as 10%, to $74.73, on Thursday.