Penn National Plans $750M Buyback, Eyes Full Acquisition of Barstool Sports

Penn National Gaming (NASDAQ:PENN) is preparation to repurchase up to $750 billion worth of its seriously under the weather stock. It is also sounding to win the 64 percent of Barstool Sports it doesn’t own sometime inwards early 2023.

The regional cassino operator made those announcements earlier today inward connective with its fourth-quarter earnings report. William Penn National said it earned 26 cents a deal on revenue of $1.57 1000000000 in the lowest iii months of 2021. Analysts expected earnings per divvy up of 53 cents on sales of $1.51 billion.

The company’s revenue and earnings before interest, taxes, depreciation, amortization, and restructuring or lease costs (EBITDAR) for the stop surpassed both 2020 and 2019 levels. In the viewing of the coronavirus pandemic, gaming analysts are measuring operators’ 2021 results against those posted inward 2019, which was a normalized climate for the industry.

For this year, the largest regional gambling casino manipulator forecast meshing revenue chain of mountains of $6.07 1000000000000 to $6.39 billion, and an familiarised EBITDAR chain of mountains of $1.85 1000000000000 to $1.95 billion.

Barstool Provides Pleasant Surprises

Penn shares plunged 58.12 percent o'er the past tense year and are away 67.5 percent from the 52-week luxuriously due inward big division to investors fretting well-nigh the political economy of online sports betting.

However, it was the operator’s digital gaming unit, including Barstool Sportsbook, that provided some impressive fourth-quarter surprises. In breaking come out its digital results for the number one time, Penn said that business sector missed $6 one thousand thousand on revenue of $150 one thousand thousand inward the October through and through Dec 2021 period, spell analysts expected a loss of $20 zillion on sales of $114 million. For 2022, Penn’s digital operations are expected to turn a loss $50 million, well-below prior guidance calling for a deprivation of $80 million.

Despite Digital’s ~4 state/province launches inwards 2022, management expects $50 meg in digital losses vs. peers losing $100 million+. Management also expects profitability inward 2023 vs peers expecting break-even/slight losses,” said Roth Capital psychoanalyst Edward VIII Engel inwards a annotation to clients today.

On a related note, William Penn CEO Jay Snowden said the company plans to to the full gain Barstool Sports in too soon 2023. That proclamation comes as disceptation continues swirling around Barstool founder David Portnoy and his sexual dalliances.

In January 2020, Penn paid $163 million for a 36 percent stake in Portnoy’s company, with rights to eventually own the sports media property outright for $450 million.

Buyback Puts ‘Floor’ Under Penn Stock

Penn concluded the 4th billet with $1.9 1000000000 inward hard cash on mitt and sum up liquidity of $2.5 billion. One psychoanalyst says the percentage repurchase program, which runs through January 2025, is a electropositive sign.

“The board’s $750 jillion divvy up authorisation should help pose a floor inwards the stock. Given the recent weakness, we believe this is a great sign that at electric current levels, the companion views their shares as massively undervalued,” said Stifel analyst Steven Wieczynski in a take down to clients.

While portion repurchases among S&P 500 companies smasher a record lowest year, the gaming manufacture is participating inwards that trend in only when modest fashion. Penn’s buyback architectural plan is ranking as 1 of the largest inward the aggroup since the come out of 2021.