PENN
PENN Entertainment, Inc.
$16.88
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 29.2% below fair value
You pay
$16.88
Bear
$19.08
Fair
$23.85
Bull
$28.63
Bear
$19.08
+13.0%
$1.29 × 16x P/E
Fair
$23.85
+41.3%
$1.29 × 20x P/E
Bull
$28.63
+69.6%
$1.29 × 24x P/E
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
13.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $20.29 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $23.85 per share.
Warnings
Wall Street's average price target is $20.29 (from 47 analysts). Our estimate is 25% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples