Penn Entertainment Stock Soars on Positive ESPN Bet Data

Introduction

Penn Entertainment stock is experiencing significant gains following an analyst's upgrade based on favorable download data for the sports-gambling service ESPN Bet. BofA Securities analyst Shaun Kelley upgraded Penn's stock to Buy from Neutral and also raised the price target from $27 to $30.

Background

Penn Entertainment recently sold Barstool Sports back to its founder, Dave Portnoy, during the summer. In August, Walt Disney sold the ESPN trademark to Penn Entertainment as the company sought to capitalize on the growing popularity of online sports betting. Subsequently, Penn rebranded Barstool Sportsbook as ESPN Bet.

ESPN Bet's Success

According to Shaun Kelley's research note, ESPN Bet has been seeing impressive initial download activity and has consistently remained in the top one or two spots among all free apps on Apple's iOS store since last Tuesday. This indicates that the app is effectively reaching its target audience.

Stock Performance

As a result of the positive news, Penn's stock saw a 5.8% increase on Monday, reaching $26.01 per share. This marks the stock's highest close since August 9th. It is worth noting that the stock has experienced a 12% decline throughout this year.

In conclusion, Penn Entertainment's stock is thriving due to the success of ESPN Bet. The app's strong download numbers and high rankings in the iOS store demonstrate its appeal to sports gambling enthusiasts. As a result, Shaun Kelley, an analyst at BofA Securities, upgraded Penn's stock and increased the price target.

Online Sports Betting in a Competitive Landscape

The online sports betting industry is fiercely competitive, with only a few key players dominating the field. ESPN Bet finds itself in direct competition with industry giants such as Flutter Entertainment's FanDuel and DraftKings.

Analyst Clark Lampen Upgrades Price Target on DraftKings

In related news, BTIG analyst Clark Lampen recently raised his price target on DraftKings to $47, up from $38. Lampen also reaffirmed his Buy rating on the stock. Lampen justified his decision by stating that although DraftKings' shares have already more than doubled since mid-February, he believes they still have room for further growth. He attributed this optimism to recent improvements in the company's economics and execution, which suggest a higher probability of realizing additional upside potential.

Impressive Performance for DraftKings

DraftKings' stock has experienced a remarkable surge, skyrocketing by 239% in value this year alone. The company revealed that in the third quarter, monthly unique players increased by 40% compared to the previous year. Additionally, average revenue per monthly unique players also witnessed an upward trajectory.

Remaining a Market Leader Despite Competition

Lampen expressed confidence in DraftKings' ability to maintain its position as one of the market leaders, even in the face of substantial competition within the rapidly expanding U.S. ecosystem. This belief is reflected in DraftKings' continued stock momentum, with shares reaching their highest mark since November 2021 as they rose by 0.7% to $38.64 on Monday.

In conclusion, the online sports betting industry is a highly competitive space, but DraftKings has positioned itself for success with its impressive performance and potential for continued growth.