Takeaways
- PENN Entertainment received a ratings upgrade and higher price target from Bank of America on Monday due to the popularity of its new ESPN Bet app.
- PENN purchased the rights to the popular sports name to Walt Disney for $1.5 billion in August.
- Bank of America said ESPN Bet was the first or second most popular free app on the iOS store since its launch on November 14.
PENN Entertainment (PENN) shares jumped after Bank of America said Monday that the sports gaming operator benefited greatly from its $1.5 billion acquisition in August of the rights to popular sports brand ESPN owned by Walt Disney (DIS).
Bank of America analyst Shaun Kelly upgraded his rating on PENN Entertainment shares to buy from neutral and increased his price target from $27 to $30.
Kelly reported that initial download and app activity for Penn's rebranded ESPN Bet app, which launched Nov. 14, was “much stronger than expected.” The analyst said PENN's initial offerings on the app showed promotional discipline and highlighted what he called “flat” third-quarter profits being better than expected for the company's core gaming business.
Kelly noted that ESPN Bet has been the first or second most popular free app on Apple's (AAPL) iOS store since its launch, with 865,000 cumulative downloads and a 4.8 rating on the app. #39;App Store, even without data from Sunday's NFL games.
The analyst BoA was also optimistic about the company's future, saying “we're seeing encouraging signs with full-screen takeovers on app/web and early content mentions.”
PENN Entertainment shares have took off after the news, reaching their highest level since the ESPN deal was announced.
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Source: investopedia.com