"The stock is signaling bearish TREND (quantitatively)," writes Hedgeye CEO Keith McCullough. "In addition, our view isn’t that they’re going to have a blowout quarter. So I want to put it on the bench, for now."
“PENN was actually a big outperformer in their markets relative to their peers in Q4,” notes Hedgeye Gaming sector head Todd Jordan. “Overall regional gaming revenues have been down in recent months (year-over-year), but PENN has outperformed in most of its markets.”
“The bigger part of the story,” Jordan continues, “is we think the company is at its inflection point as free cash flow accelerates and capital returns to shareholder may be forthcoming.”
REGIONAL GAMING (SAME-STORE)| DECMBER FINAL
On a same-store basis for mature regional markets, gaming revenues disappointed in December. Actual same-store revenues for December came at -1.5% YoY, below our model forecast, vs. -1.0% in November. Looking out into 1Q 2017, we predict that revenues will be choppy, with JAN and FEB likely down single digits, and March eventually bouncing back into positive territory.
