- PENN Entertainment received a ratings upgrade and a higher price target from Bank of America Monday on the popularity of its new ESPN Bet app.
- PENN bought the rights to the famous sports name from Walt Disney for $1.5 billion in August.
- Bank of America said that ESPN Bet has been the first or second most popular free app on the iOS store since its launch Nov. 14.
Shares of PENN Entertainment (PENN) jumped after Bank of America said Monday that the sports gambling 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 stock to buy from neutral and boosted his price target to $30 from $27.
Kelly indicated that initial download and app activity for Penn’s rebranded ESPN Bet app, which launched Nov. 14, was “much stronger than anticipated.” The analyst indicated that PENN’s initial offers on the app showed promotional discipline and pointed to what he called “stable” third-quarter earnings being better than expected for the firm’s core gaming business.
Kelly noted that ESPN Bet has been the first or second most popular of all free apps at Apple’s (AAPL) iOS store since it launched, picking up 865,000 cumulative downloads and a 4.8 app store rating, even without data from Sunday’s NFL games.
The BoA analyst was also optimistic about the future for the company, saying that “we see encouraging signs with full-screen takeovers on the app/web and early content mentions.”
PENN Entertainment shares took off after the news, hitting their highest level since the ESPN deal was announced.