Penn National Gaming (PENN) - Get Report rose Friday after the company announced that 30 of its 41 gaming and racing properties have resumed operations after closing in March for the coronavirus epidemic.
That represents more than 70% of its regional gaming portfolio in 13 of the 19 states in which it operates. The latest reopenings came Friday at Penn National’s four Ohio properties and in Pennsylvania at Hollywood Casino at the Penn National Race Course.
Penn National has implemented social distancing and safety protocols at all the reopened properties, developed in consultation with state regulators and local and state public health officials, the company said in a statement.
Last week, Deutsche Bank cut its rating on Penn National to sell from hold on valuation concerns.
Penn National will be more challenged in improving its margins than its peers will "given prior margin disciplines and higher-than-peer blended gaming taxes, which have forced Penn, over time, to be leaner than most," the firm said in a commentary.
To be sure, Deutsche lifted its share-price target on Penn National to $22 a share from $12, because "the margin profiles of regional gaming operators will be stronger post the pandemic," the bank’s analysts said.
"We recognize that with this call we are likely arguing against a bull case, of sports betting and iCasino being a huge windfall for Penn National, which will have no near-term resolution."
Penn National recently traded at $33.17, up 4.52%. The stock has skyrocketed 634% in the past three months, compared to 31% for the S&P 500.