UPDATE: Credit Suisse Raises PT on Penn National Gaming on Successful REIT Transaction
In a report published Friday, Credit Suisse analyst Joel Simkins reiterated an Outperform rating on Penn National Gaming (NASDAQ: PENN), and raised the price target from $60.00 to $64.00.
In the report, Simkins noted, “Shares have traded better than anticipated YTD and while they may pause until regulatory approvals are attained, investors are getting more comfortable with the separation, ability for OpCo and PropCo to grow, and compelling value creation post transaction. Our TP is based on a multiple of 8.5x our 2015 EBITDA estimate, discounted back. Our new estimates reflect updated guidance. We are revising our 2013/2014 EPS estimates to $2.67/$2.82 (from $2.58/$2.95) respectively. PEN reported 1Q13 adjusted EPS of $0.69 versus guidance of $0.64 and our estimate of $0.66. Like other regional operators, PENN experienced softness in the top line; however, 1Q highlighted cost controls as EBITDA margin expanded to 27.6% (+38 bps), likely driven by OH.”
Penn National Gaming closed on Thursday at $57.92.
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