Key takeaways
- PENN Entertainment on Monday received a ratings upgrade and a higher price target from Bank of America due to the popularity of its new ESPN Bet app.
- PENN bought the rights to Walt Disney’s famous sports name for $1.5 billion in August.
- Bank of America said ESPN Bet has been the first or second most popular free app in the iOS store since its launch on November 14.
Shares of PENN Entertainment (PENN) rose after Bank of America said Monday that the sports betting operator has benefited greatly from its $1.5 billion acquisition in August of the rights to the famous ESPN sports brand owned by Walt Disney (DIS).
Bank of America analyst Shaun Kelly raised his rating on PENN Entertainment shares to buy from neutral and increased his price target to $30 from $27.
Kelly noted that initial download and activity for Penn’s ESPN Bet app, which launched Nov. 14, was “much stronger than anticipated.” The analyst indicated that PENN’s initial offerings on the app showed promotional discipline and noted that what he called “stable” third-quarter earnings were 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 in Apple’s (AAPL) iOS store since its launch, with 865,000 cumulative downloads and an app store rating of 4.8, even without match data. of Sunday’s NFL.
The BoA analyst was also optimistic about the company’s future, stating that “we see encouraging signs with full-screen in-app/web acquisitions and early content mentions.”
PENN Entertainment shares took off after the news, reaching their highest level since the deal with ESPN was announced.
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