The analyst is optimistic about the company’s partnership with Barstool Sports, which produces blog posts, podcasts, social media and live events. Penn National bought a 36% stake in the company earlier this year.
The strategic benefits of the partnership are becoming “increasingly evident,” Jonas wrote in a report. The beginning of a new sports app next month also can help the company, he said.
Penn National recently traded at $55.89, up 4.72%. The stock has soared 119% this year.
Last week, Goldman Sachs analyst Stephen Grambling initiated coverage of Penn National with a buy rating and $60 share-price target.
He’s enthusiastic about the Wyomissing, Pa., company's sports-gambling potential.
“PENN sits at the cross-section of a rapidly rebounding regional casino space and inflecting growth in sports betting,” Grambling wrote in a commentary.
Penn National "has unique positioning relative to peers based on mobility and covid-19 data analysis,” he said. “This … guides our near-term segment earnings before interest, taxes, depreciation and amortization above consensus expectations.”
In addition, “we believe Barstool Sports’ embedded customer base and content creation engine will drive one of the lowest customer acquisition costs in the sports betting industry, allowing PENN to quickly take share within our proprietary iGaming and sports betting models,” Grambling says.
“As the company delivers on existing and mobile growth opportunities, we see upside to consensus estimates.”