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Penn National Gaming Stock Gets Upgraded By Morgan Stanley Citing Potential Growth Of theScore and Barstool

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Penn National Gaming hit a near-year low of $37.35 last Friday. Today, Morgan Stanley upgraded the casino and sports betting stock to “overweight” from “equal weight” with a price target of $51 despite the recent weakness in shares. Morgan Stanley said $PENN presents a solid buying opportunity due to the potential for growth of the theScore and Barstool Sports brands.

A pivot point for Penn National Gaming stock?

According to Schaeffer’s Investment Research, multiple trendlines emerged as pressure for the stock’s decline. Most recently the 20-day moving average, putting the security at an almost 60% TYD deficit. However, Schaeffer’s analysts note that the stock could be overdue for a short-term bounce, as its 14-day Relative Strength Index of 32 indicates it’s just on the cusp of being “oversold.”

Lillian Currens, Schaeffer’s Deputy Editor says:

Should this be a pivot point for PENN, there’s plenty of room for analyst upgrades. Coming into today, seven of the 15 in coverage called the stock a “hold,” compared to eight “buy” or better ratings. Meanwhile, short interest has been on the rise, up 5.8% in the last two reporting periods, and the 11.22 million shares sold short make up a solid 6.8% of the stock’s available float, leaving room for a short squeeze to push the equity higher.

Options bulls targeting $PENN

Options bulls are targeting  $PENN with 4,113 calls across the tape so far, three times the intraday amount. The most popular by far is the weekly 4/29 40-strike call, with positions being sold to open here. In distant second is the 4/29 38-strike call.


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