Why Penn National Gaming's (PENN) Stock May Move Higher on Wednesday

NEW YORK (TheStreet) -- Shares of Penn National Gaming Inc.  (PENN) may move higher today following an upgrade by FBR Capital from "market perform" to "outperform" with a price target of $15.00 (from $13.00).

"We continue to shift away from the Macau-centric stocks toward the much-maligned U.S. regionals with the upgrade of Penn National Gaming  to Outperform. Although we are cutting near-term estimates with ongoing weakness in key markets, we are raising 2015-2016 estimates to above-Street levels and lifting our price target from $13 to $15 as we layer in Penn's healthy project pipeline," said FBR Capital analyst Jake Fuller.

"While we concede that it may be early, we see a bull case taking shape: cost controls leave Penn poised for an eventual regional recovery; a healthy project pipeline should drive 10% EBITDA growth through 2017 before assuming any recovery, and we do not see that reflected in consensus; and at the current price, we argue that investors are effectively getting existing operations at a fair price and paying little to nothing for the pipeline," Fuller added.

Shares of Penn National closed at $11.74 yesterday. In pre-market trade this morning, the shares are up 0.41, or 3.49%, to $12.15.

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TheStreet Ratings team rates PENN NATIONAL GAMING INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

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