Over the last ninety days, Penn Entertainment (NASDAQ: PENN) has increased by 10.46% in a quite subdued manner. The regional casino operator may see further growth, according to at least one analyst.
Morningstar analyst Dan Wasiolek set a fair value estimate of $22 on Penn, indicating an increase of more than 10% from the current stock price, citing contributions from improvements at a few local casinos and internet betting. He is supportive of the operator's efforts to renovate a number of its gambling establishments.
"We also think a handful of development projects across its regional portfolio over the next few years stands to improve the company’s competitive standing,” observes Wasiolek. “The first of these projects was the opening of a relocated land property from a riverboat location in Joliet, Illinois, in August 2025. This is followed by two projects scheduled to open in the first half of 2026.”
The opening of a land-based casino in Joliet, Illinois, and the remodeled Aurora, Illinois, site in early 2026 are viewed as stimuli for Penn during a period of increasing gaming revenue in Illinois. The gambling business announced earlier this month that the public would be able to visit the $206 million, 384-room expansion at M Resort in Henderson, Nevada, starting on December 1.
Interactive Boost for Penn Entertainment Stock
Penn’s ESPN Bet unit remains a source of anxiety for some in the financial community, with some calling the current football season a make-or-break era for the sports betting app.
However, there is a perception on Wall Street that ESPN Bet made a solid start to the 2025 football season, and statistics show that Penn's Hollywood iGaming platform is making remarkable progress in the higher margin online casino sector. Penn's online gambling endeavors, according to Wasiolek, will help the operator's earnings before interest, taxes, depreciation, amortization, and restructuring or rent expenses (EBITDAR).
“Penn is positioned to benefit from the multi-billion-dollar sports betting and iGaming market, aided by further integration with the ESPN franchise, as well as the addition of parlay products and a dedicated iGaming app launched in early 2025,” adds the analyst. “We expect the company to maintain a mid-single-digit percentage revenue share and expect profitability in 2026, with EBITDAR margins ramping to the low-20s by the end of the decade. We forecast for 29% of the company’s total sales to be generated from its interactive business by 2029, a meaningful lift from 14%-15% in 2024.”
Similar to competitors Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM), Penn operates across multiple channels, including both online and land-based operations. According to Wasiolek, Penn can eventually use its physical casinos to boost its internet presence.
Regional Casinos Resilient in a Tough Situation
Penn's sole gaming establishment in the Las Vegas area is the previously mentioned M Resort. These days, that lack of exposure is a good thing because Strip tourism is declining, and some analysts fear that this negative trend may eventually affect casinos that cater to Las Vegas residents. In summary, Penn's lack of familiarity to Las Vegas is advantageous in this setting.
"Amid economic uncertainty, Penn’s drive-to casino locations and digital businesses are performing well,” notes Wasiolek. “We see revenue growth continuing as the company launches several noteworthy products over the next several quarters. We think 2026-28 sales growth can average 7%, fueled by new products.”
Because the South is a more competitive market where the operator is battling new services from rivals, the Morningstar analyst is more positive about Penn's Midwest portfolio.