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Penn Entertainment weighs ESPN Bet exit, theScore sale

Key Takeaways

Penn Entertainment faces strategic decisions that could enhance company value. Analysts consider ending the partnership with ESPN Bet and selling theScore as potential actions. The company’s stock has lost significant value in recent months, increasing pressure on management.

ESPN Bet Under Pressure

Penn Entertainment operates the sports betting platform ESPN Bet in collaboration with Walt Disney. However, its performance has fallen short of expectations. Analyst Jeffrey Stantial from Stifel sees terminating the partnership as one of the value-enhancing options. The agreement with ESPN runs until August 2026, but both parties have the option to withdraw early.

theScore as a Sale Candidate

Another possible step is the sale of theScore, a Canadian sports media and betting platform that Penn acquired in 2021 for $2 billion. An official sale has not been confirmed. However, theScore founder John Levy has expressed criticism of Penn Entertainment’s sports betting strategy.

Stock Price and Market Development

Penn Entertainment’s stock recently traded at $17.26, losing over 23% in the past month. Analysts see a potential price target of $23 if the company adjusts its strategy. The upcoming annual meeting in June could play a crucial role. Hedge fund HG Vora has nominated three board candidates with experience in the gambling industry.

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Focus on Core Business

Penn Entertainment may shift its focus more towards its land-based casino business. Analysts view the company’s regional gaming properties as well-positioned. Geographic diversification and stable demand for land-based casino gaming could provide long-term stability.

Our Assessment

Penn Entertainment faces critical decisions. The future of ESPN Bet and theScore remains uncertain. Investors should closely monitor developments surrounding the annual meeting in June. Refocusing on the core business could be a viable strategy to ensure long-term stability and growth.

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