Deutsche Bank Raises Price Targets On 3 Casino Stocks

Analysts at Deutsche Bank on Wednesday raised their price targets for three regional American casino companies. The price target boosts were largely based on increases in broad gambling revenue estimates for 2015 and beyond.

Penn National Gaming, Inc PENN

Analysts reiterated their Buy rating for Penn and raised their price target for the stock from $17.00 to $20.00. Analysts believe there is significant upside to Penn’s 4Q14 guidance, and they believe that upward revisions to 2015 guidance are coming when Penn releases earnings in early February.

In addition to earnings, analysts predict strong gross gaming revenue (GGR) numbers for January 2015 will be a catalyst for the stock when the numbers are released later in February. Finally, the opening of Penn’s new Plainridge facility later in 2015 could also provide a boost for Penn’s stock.

Pinnacle Entertainment, Inc PNK

Analysts reiterated their Hold rating of Pinnacle’s stock and raised their price target from $21 to $24. They raised both their 4Q14 and 2015 earnings estimates for the company. The new price target is the result of a sum-of-the-parts valuation approach in which an 8.5 multiple is applied to projected 2016 earnings before interest, taxes, depreciation and amortization (EBITDA) estimates.

Boyd Gaming Corporation BYD

Analysts reiterated their Hold rating on Boyd and raised their price target for the stock from $9.00 to $13.00. Deutsche Bank is projecting 1 percent revenue growth for Boyd in 2015 and 2.5 percent growth in 2016. The Las Vegas market is expected to be strong in 2015, and analysts expect a strong 4Q14 beat from Boyd when the company releases earnings in early March.