Will Penn Stock Maintain Upwards Momentum?

Penn Entertainment shares (NASDAQ: PENN) have gained 1.35% in early trading, having shown a strong recovery over the past few months. Despite a 15% decline over the past year, the company’s stock has surged by an more than 30% since the start of June.

With a significant sentiment shift playing out over recent months, attention has been growing on the gaming and entertainment company's latest movements, with more names picking out the stock as a buy.

Truist Securities are one of the analysts to have reaffirmed their stance on Penn’s potential by maintaining a “buy” rating and setting a price target at $25. This suggests more than a 25% potential increase from the latest stock price a shade under $20.

Other analysts to upgrade recently include Barclays, and Deutsche Bank. Barclays upgraded their price target on PENN from $22 to $23, maintaining an Overweight rating. Both noted as improvement areas were core gaming and digital.

Deutsche Bank's upgrade moved the price on Penn stock from $18, to $20, but with a Hold rating in tact. Q2 earnings were the catalyst, but there are other potential developments that could see meaningful price action changes.

Rumours of a potential takeover bid have been circulating since late May. However, analysts reckon such a transaction is unlikely to materialize, considering the company's probable reluctance to pursue a sale.

A notable development in Penn’s strategic initiatives is the hiring of Aaron LaBerge as Chief Technology Officer (CTO) for its sports betting venture, ESPN Bet. LaBerge’s previous tenure at Walt Disney equips him with extensive experience in developing mobile applications for ESPN, as well as his contributions to fantasy sports games. His expertise is expected to significantly bolster Penn's competitiveness in the online sports betting market.

Despite Penn's main earnings originating from its land-based casinos, the focus has increasingly tilted towards enhancing its digital offerings, particularly the ESPN Bet sports betting app. Consequently, investor attention has shifted towards this segment, with plans underway to upgrade the app’s appeal to a broader spectrum of bettors.

As Penn Entertainment leverages new leadership in technology and refines its online presence, the company is positioning itself to potentially capitalise on the lucrative sports betting sector. With its stock rebounding amid takeover whispers and favourable analyst forecasts, Penn's journey ahead could prove to be one worth watching.