PENN: MULTIPLE DRIVERS

Takeaway: PENN will likely tee off on the bears with a strong Q2, upward 2015/2016 EPS revisions, and the start of a 2 yr growth period

CALL TO ACTION

PENN’s stock has climbed 27% this year on stabilizing regional gaming revenues, transaction-fueled optimism (real estate) surrounding the regional gaming companies and proximity to the opening of the new Plainridge racino on June 24. So what will drive even more upside? More and better. We think regional gaming trends are even better than anticipated by the Street and Q2 earnings should be a solid beat even before Plainridge contributes.

 

Plainridge could contribute win per slot in excess $400 per day, well north of Street expectations. As investors start to look out to 2016, they will consider PENN a growth company again with a full year of Plainridge and the opening of the Penn managed Jamul casino near San Diego in Q2/Q3 2016. Given the strong performance of the Indian casinos near San Diego, we believe Jamul may surpass investor expectations as well. 

 

Please see our detailed note: 

http://docs.hedgeye.com/HE_PENN_6.11.15.pdf

 

 


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