Penn Entertainment (PENN) saw the CEO purchase 54,200 shares at $18.44 on 9/3 for a near $1M purchase and follows notable insider buys in May closer to $15.50 average price. The action also came on a day that PENN saw large put sellers at September $18, October 4^th (W) $18 and January $10 strikes and still has 10,000 October $20 calls in open interest and 3000 September $17.50 calls from buyers.

PENN’s weekly chart shows bullish RSI divergences forming into this long bottoming process and MACD remains in a buy signal, clearing $20 can allow shares to push higher to $23.

PENN is North America’s leading provider of integrated entertainment, sports content, and casino gaming experiences. PENN operates  43 properties in 20 states, online sports betting in 18 jurisdictions and iCasino in five jurisdictions, under a portfolio of well-recognized brands including Hollywood Casino,  L’Auberge, ESPN BET, and theScore Bet Sportsbook and Casino. In August 2023, PENN entered into a transformative, exclusive long-term strategic alliance with ESPN.  PENN’s portfolio is further bolstered by our industry-leading PENN Play customer loyalty program, which offers its over 29 million members a unique set of rewards and experiences across business channels.

PENN has a market cap of $2.8B and trades 8.3X EBITDA, 21.1X Earnings, 1.9X EV/Sales with the balance sheet carrying a significant amount of debt. PENN revenues are seen growing 4-6% annually in FY25 and FY26. The Deal reported in July that Flutter is eyeing PENN as a potential buyout and Boyd (BYD) has also indicated interest in an acquisition. PENN should benefit from the upcoming NFL season with the rollout of retail ESPN sportsbooks, an increasing parlay mix and hold percentage and new features. PENN also launched in NY in late August.

Analysts have an average target of $22.75 and short interest is elevated near 15% of the float. Barclays with a raised $23 target saying the core gaming outlook and sequential digital improvement are both reassuring.