Investors Buy High Volume of Call Options on PENN Entertainment (NASDAQ:PENN)

Key Points

• Unusual options activity: Traders bought 11,118 call options on PENN, a roughly 147% increase versus the stock's typical call volume, signaling elevated bullish interest in the near term.
• High institutional ownership: Hedge funds and institutional investors own about 91.69% of PENN's shares, and several smaller funds recently initiated or increased positions.
• Mixed fundamentals and analyst view: PENN beat Q2 estimates with $0.11 EPS (vs. $0.05 expected) and $1.78B revenue but still posts a negative net margin, and analysts hold a consensus "Hold" rating with a $20.21 target.

PENN Entertainment, Inc. (NASDAQ:PENN - Get Free Report) saw some unusual options trading activity on Wednesday. Traders bought 11,118 call options on the company. This is an increase of approximately 147% compared to the typical volume of 4,494 call options.

Institutional Trading of PENN Entertainment

A number of institutional investors and hedge funds have recently modified their holdings of PENN. Quarry LP purchased a new position in shares of PENN Entertainment in the fourth quarter valued at approximately $36,000. IFP Advisors Inc boosted its position in shares of PENN Entertainment by 76.2% during the 4th quarter. IFP Advisors Inc now owns 2,766 shares of the company's stock valued at $41,000 after acquiring an additional 1,196 shares during the last quarter. Modus Advisors LLC acquired a new position in PENN Entertainment in the 4th quarter valued at about $47,000. Cloud Capital Management LLC purchased a new stake in shares of PENN Entertainment in the 3rd quarter valued at approximately $54,000. Finally, Triumph Capital Management acquired a new stake in shares of PENN Entertainment during the 3rd quarter worth approximately $54,000. Hedge funds and other institutional investors own 91.69% of the company's stock.

PENN Entertainment Stock Performance

Shares of NASDAQ:PENN traded up $0.03 during trading on Wednesday, hitting $18.03. 889,258 shares of the stock traded hands, compared to its average volume of 4,424,562. PENN Entertainment has a 52-week low of $11.65 and a 52-week high of $20.60. The company has a quick ratio of 0.79, a current ratio of 0.79 and a debt-to-equity ratio of 3.92. The company has a fifty day moving average price of $14.83 and a two-hundred day moving average price of $14.71. The company has a market cap of $2.41 billion, a price-to-earnings ratio of -2.69, a P/E/G ratio of 0.61 and a beta of 1.32.

PENN Entertainment (NASDAQ:PENN - Get Free Report) last posted its earnings results on Thursday, April 23rd. The company reported $0.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.05 by $0.06. PENN Entertainment had a negative net margin of 13.55% and a positive return on equity of 0.42%. The business had revenue of $1.78 billion for the quarter, compared to analyst estimates of $1.74 billion. During the same period in the prior year, the company posted $0.68 EPS. The company's revenue for the quarter was up 6.4% on a year-over-year basis. As a group, equities analysts predict that PENN Entertainment will post 0.97 EPS for the current year.

Analyst Upgrades and Downgrades

PENN has been the topic of several analyst reports. Deutsche Bank Aktiengesellschaft lifted their price target on shares of PENN Entertainment from $17.00 to $18.00 and gave the stock a "hold" rating in a report on Friday, April 24th. Citigroup raised their price objective on PENN Entertainment from $15.00 to $16.00 and gave the stock a "neutral" rating in a research report on Monday, March 2nd. Benchmark upgraded PENN Entertainment from a "hold" rating to a "buy" rating and set a $21.00 target price on the stock in a research note on Thursday, March 5th. Wells Fargo & Company upped their target price on PENN Entertainment from $16.00 to $18.00 and gave the company an "equal weight" rating in a research report on Thursday, April 16th. Finally, Morgan Stanley increased their price target on PENN Entertainment from $15.00 to $16.00 and gave the company an "equal weight" rating in a research note on Wednesday, April 8th. Eight equities research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the company has a consensus rating of "Hold" and a consensus target price of $20.21.

About PENN Entertainment

PENN Entertainment, Inc NASDAQ: PENN is a leading operator of gaming and racing facilities in the United States. The company's business activities encompass land-based casinos, pari-mutuel racetracks, off-track wagering, and ancillary amenities such as hotels, restaurants and entertainment venues. In August 2022, the company rebranded from Penn National Gaming to PENN Entertainment to reflect its expanding footprint across digital and traditional segments of the gaming industry.

The company's portfolio includes well-known properties under the Hollywood Casino and Ameristar Casino brands, located across multiple states including Pennsylvania, Ohio, Missouri and West Virginia.

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