UPDATE: Morgan Stanley Initiates Gaming and Leisure Properties with Equal-Weight Rating, $46 PT as Acquisition Upside Offsets Overhangs

In a report published Friday, Morgan Stanley analyst Thomas Allen initiated coverage on Gaming and Leisure Properties GLPI with an Equal-Weight rating and $46.00 price target. In the report, Morgan Stanley noted, “Our market analysis suggests that GLPI, as the only publicly traded REIT focused on gaming assets, has sizeable EBITDA opportunity through acquisitive growth. GLPI premium multiple vs. regional gaming operators (6-8x), and liquidity position is an additional benefit for acquisitions. Deals can diversify its portfolio and tenant-base, unlocking upside to the stock's multiple. Several overhangs that could potentially weigh on valuation include GLPI's single-tenant risk, dual-mgmt structure, and investors' lack of familiarity / interest in regional gaming assets.” Gaming and Leisure Properties closed on Thursday at $45.81.