Morgan Stanley's Thomas Allen upgraded shares of Penn National Gaming, Inc PENN in a research note issued after the close Wednesday. The analyst raised the stock from Underweight to Equal-weight.
The change in recommendation followed a firm survey which showed "further improvement in U.S. gaming." Allen said, "Chinese play in the US is a risk, but mostly concentrated in Las Vegas and Atlantic City. Our survey results lead us to raise estimates for Boyd Gaming Corporation BYD and Penn," according to the Morgan Stanley analyst.
Allen cited three reasons for the upgrade:
- "our positive AlphaWise survey results support continued healthy US gaming trends, with last year's survey suggesting reliability;
- various data points across the consumer sector point to ongoing strength and resiliency of the low-end consumer, which should continue to benefit regional gaming GGR; and,
- concerns around May trends and the read-through from weaker restaurant data could be overblown, with a rainy May potentially an unforeseen tailwind."
Shares of Penn were indicated up about $0.25 in after-hours trade Wednesday.
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