UPDATE: Imperial Capital Upgrades Penn National Gaming to Outperform, Raises PT

In a report published Friday, Imperial Capital upgraded its rating on Penn National Gaming

from In-Line to Outperform, and raised its price target from $47.00 to $60.00. Imperial Capital noted, “We are changing our rating on the PENN common shares to Outperform from In-Line and we are raising our one-year price target to $60 from $47. We view the company's announcement as a positive for the PENN stock. After the spin-off of its real estate assets and the subsequent sale-lease-back, Penn National (OpCo) will be a management company with 5.5x total leverage. We think the remaining shares could be worth around $5, based on a 6.5x valuation multiple, as shown in Figure 5. We think the spun-off REIT shares (PropCo) could be worth around $55 per share based on a 3.4% dividend yield (plus 25% premium yield over the industry average). That leads to a combined value of $60 per share for the PENN common shares.” Penn National Gaming closed on Thursday at $48.65.