PENN Entertainment jumps after Mizuho points to compelling valuation

Mizuho started off coverage on PENN Entertainment (NASDAQ:PENN) on Tuesday with a Buy rating.

Analysts Ben Chaiken and Alok Patel said the bullish thesis on the casino stock is based on compelling valuation aside from the Interactive segment, an attractive risk-reward profile, and upside to estimates through ESPN Bet, which could drive meaningful market share and EBITDA. The positive view on PENN's online sports betting business is that there is little or no value for EPSN Bet priced into shares at the moment, which presents investors a call option of sorts on future upside.

Mizuho assigned a price target of $29 to PENN and pointed to upside all the way to $45. Shares of PENN jumped 6.64% in morning trading on Tuesday to $18.16 vs. the 52-week range of $16.46 to $31.63.

Seeking Alpha analysts have a mixed view on PENN, summarized by Howard Jay Klein who advised investors to proceed with a blinking yellow light until the middle of the year.