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PENN reports Thursday and we think the quarter could be slightly better than guidance. Expectations remain low despite a good move in the stock over the last two months.

The main tenet of our post Q4 earnings bullishness was that guidance had been cut to realistic levels.  We always liked the management team, growth prospects, and balance sheet and were encouraged to see significant earnings risk taken out of the equation.  The stock is up 29% since its February lows so it doesn’t appear to be a near-term table pounder.  However, with a $1 guidance for 2010 looking beatable and a promising long-term outlook, any stock weakness should probably be taken advantage of.

We expect PENN to beat both consensus and guidance when they report this Thursday. We estimate that PENN will print $597MM of revenues, $143MM of EBITDA and $0.25 of Adjusted EPS.  Since everyone has the state reported numbers we won’t bore you with all the details… you know where to find us if you care about them.  Below are just a few assumptions we made

  • Property level EBITDA of $161.4MM
  • Corporate expense of $18MM and stock comp of $6.8MM – in-line with guidance
  • D&A of $54MM
  • Net interest expenses of $34MM
  • 45% tax rate in line with mgmt guidance