PENN
PENN Entertainment, Inc.
$21.23
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 14.5% below fair value
You pay
$21.23
Bear
$19.85
Fair
$24.82
Bull
$29.78
Bear
$19.85
-6.5%
$1.29 × 16x P/E
Fair
$24.82
+16.9%
$1.29 × 20x P/E
Bull
$29.78
+40.3%
$1.29 × 24x P/E
Key Value Driver
Normalized P/E multiple (20x base case)
Implied Market Multiple
16.5x
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 $23.50 from 47 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $24.82 per share.
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