Penn Entertainment’s digital turnaround story gained another vote of confidence this week as Stifel raised its price target on the company and praised its online casino-focused strategy.
Analyst Jeffrey Stantial increased his target price to $25 from $23 while maintaining a buy rating following meetings with Penn management.
Shares closed Thursday at $21.21, up over 28% over the past year.
“We come away from meetings positive on the setup into 2H26,” Stantial wrote, pointing to healthy retail trends, improving returns from recent casino development projects and what he described as the company’s “nascent iCasino-led Interactive strategy” remaining on track.
Penn shifts away from sports betting
The note offers a positive assessment of Penn’s digital business roughly six months after the company ended its sports betting partnership with Disney for ESPN Bet on Dec. 1 and shifted to the online casino focus.
“Overall, we got the sense PENN’s Interactive business continues to pace on plan now six months following ESPN termination and pivot to iCasino-led strategy,” Stantial wrote.
According to the note, Penn’s online sportsbook handle share has drifted lower as the company reduced promotional spending and reinvestment. Stifel said that was expected and has been partially offset by steady performance from Penn’s Hollywood Casino app and direct customer acquisition efforts.
Stantial also highlighted additional opportunities to improve profitability through lower marketing, administrative, payment processing and geolocation costs.
Online casino already showing strides
The shift was already showing results in the first quarter, when Penn reported online casino revenue growth of 362% and cut its digital adjusted EBITDA losses by $70 million from a year earlier.
The results come as Penn works to move past a proxy battle following years of costly attempts to gain traction in online sports betting.
Penn spent roughly $550 million acquiring Barstool Sports before selling the media company back to founder Dave Portnoy for $1 in 2023. Barstool Sportsbook struggled to gain meaningful market share, generally remaining around 2% of national sports betting handle. The company then entered a 10-year, roughly $2 billion agreement with ESPN and ended that partnership late last year after ESPN Bet failed to establish itself as a serious challenger to FanDuel and DraftKings.
Penn continues to operate sports betting through theScore Bet in 20 states and Canada, where the brand has established a strong position in Ontario. It plans to launch in its second Canadian province when Alberta online casinos and sportsbooks go live July 13.
