Penn and other sports betting equities surged on news that New York Gov. Andrew Cuomo (D) is softening his stance on online and mobile betting. However, Penn, DraftKings (NASDAQ:DKNG) and others that popped on those headlines quickly gave back hefty portions of those gains as Cuomo said he wants the state lottery to oversee mobile sports wagering, not commercial entities.
I’m not here to make casinos a lot of money. I’m here to raise funds for the state,” said the governor of the fourth-largest state.
In a note to clients today, Piper Sandler analyst Yung Kim reiterates an “overweight” rating on Penn stock while lifting his price forecast on the name to $100 from $84. Kim tells investors “questions loom” about how the Empire State will proceed with sports betting.
Maybe Too Much Hype
Since its coronavirus bottom last March, Penn stock has rapidly become one of Wall Street’s most favored gaming equities. Several analyst price targets reached into the triple digits. The 52-week high on the name is $99.24, which was reached late last year.
As is the case with other sports betting equities, much of the enthusiasm for the operator of Hollywood casinos revolves more states joining the sports wagering fray.
Penn does have robust market access. It rolled out its Bartsool Sportsbook app in its home state of Pennsylvania last September, with Michigan slated to soon follow. The company also operates land-based casinos in new “live and legal” states, such as Colorado and Illinois, as well as Louisiana and Maryland. Both states approved sports wagering on Election Day 2020.
However, New York is a different scenario, with some industry experts claiming Penn has no path into the Empire State under a single skin model.
Cuomo could render that speculation moot by allowing the New York Lottery to oversee mobile wagering, which could effectively shut out commercial operators. Some states where sports betting is legal, such as Montana, Oregon, and Rhode Island, have lottery-only models, and there’s talk that Cuomo is looking to emulate the Rhode Island template.
Reasons to Believe
With no chance that California and Texas will debate sports betting this year and limited prospects for passage in Florida, New York will take center stage among the major states in the legal mobile betting conversation.
Kim, the Piper Sandler analyst, estimates a competitive, open market could generate up to $650 million in receipts for ailing Empire State coffers.
Regarding the fate of Penn and DraftKings in New York, the analyst says there’s potential for “multiple positive outcomes,” including more legislative momentum.에볼루션 바카라사이트
His $100 call on Penn stock implies upside of 12.3 percent from where the shares currently reside.