Truist Raises Price Target for Penn Entertainment Amid Industry Doubts
Shares of Penn Entertainment saw movement following Truist’s adjustment of the firm’s price target from $23 to $25, while maintaining a Buy rating.
Interactive Strategy and Market Performance
Despite this positive outlook, Truist does not anticipate any formal strategic review for Penn soon, citing the company’s focus on its ESPN Bet product roadmap and the upcoming football season.
Higher interest rates impacting acquisition values also play a role in this expectation.
Truist acknowledges Penn’s focus on its interactive segment, particularly its digital betting operations. However, the Donerail Group’s letter highlights the underperformance of this segment, noting that despite substantial investments, Penn has not managed to disrupt the online sports betting market as anticipated.
Donerail Group’s Activist Letter
The Donerail Group, a significant shareholder in Penn Entertainment, has expressed its concerns in a public letter to the Board of Directors.
The letter criticizes Penn’s recent strategic decisions and capital allocations, arguing that the company’s stock price is significantly below its intrinsic value.
Donerail suggests that selling the company’s assets could unlock substantial value for shareholders, given the robust market for regional casino assets.
The Donerail Group also raises concerns about the compensation of CEO Jay Snowden, pointing out that his high remuneration does not align with the company’s poor performance. From 2020 to 2023, Snowden received $99.3 million in total compensation, despite the company’s stock declining significantly. This issue has attracted criticism from major institutional shareholders and advisory firms.
Recommended