PENN Expands Its Casino Footprint: Can New Projects Drive Growth?

PENN Entertainment, Inc. PENN is expanding its land-based gaming footprint through a series of property development projects, providing a potential catalyst for revenue and profitability growth. The company’s recently completed investments are already showing encouraging results, while additional projects could extend the growth runway.

PENN’s four recently completed projects contributed to second-quarter 2026 performance. Hollywood Casino Joliet continued to post strong results, while M Resort delivered record net revenues and adjusted EBITDAR following the opening of its new hotel tower. Hollywood Columbus also benefited from its new hotel tower, with July marking an all-time monthly net revenue record. Meanwhile, Hollywood Casino Aurora, which opened in June, nearly doubled admissions, slot volumes, table volumes and non-gaming revenues compared with the prior-year period.

The momentum is reflected in PENN’s financial outlook. Retail revenues increased 4% year over year in the second quarter, while adjusted EBITDAR climbed 6%. Management raised its 2026 retail revenue guidance midpoint to $5.87 billion and adjusted EBITDAR forecast to $1.963 billion.

The next major project is the relocation of Hollywood Council Bluffs, expected to open in 2028 with a projected construction budget of $180-$200 million. Management also identified three additional potential projects, including a hotel and water-to-land conversions, with possible openings spread across 2029 and 2030.

With limited new competitive supply expected in key markets, these investments could support sustained growth. However, PENN must balance expansion with deleveraging and shareholder returns, making disciplined capital allocation crucial.

PENN Faces Competition as Regional Casino Investments Accelerate

PENN Entertainment’s property expansion strategy comes amid continued investment by other regional casino operators. Boyd Gaming BYD and Caesars Entertainment CZR are two notable competitors that could challenge PENN for customers as operators upgrade properties and expand their offerings.

Boyd Gaming has a strong presence across regional gaming markets, making it a relevant peer to PENN. Its strategy includes investing in existing properties and developing new facilities, which could help strengthen customer engagement and increase Boyd Gaming’s competitive presence in key markets.

Caesars Entertainment operates a broader portfolio spanning regional casinos and destination resorts. Its scale and established customer base give Caesars Entertainment significant reach across several gaming markets, potentially increasing competitive pressure as PENN ramps up the new properties.

For PENN, the early performance of Joliet, M Resort, Columbus and Aurora provides encouraging evidence that targeted development can generate incremental demand. However, sustained returns will depend on successful property ramps, disciplined spending and PENN’s ability to differentiate its casino and entertainment offerings.

PENN’s Stock Price Performance & Valuation Trend

Shares of the company have gained 51.6% in the past six months, outperforming the Zacks Gaming industry, the broader Consumer Discretionary sector and the S&P 500 Index.

Price Performance

Image Source: Zacks Investment Research

PENN stock is currently trading at a discount to its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 12.47, as shown in the chart below.

P/E (F12M)

Image Source: Zacks Investment Research

Earnings Estimate Revision of PENN

PENN’s earnings estimates for 2026 and 2027 have trended downward in the past 60 days to $1.02 and $1.64 per share, respectively. The revised estimates for 2026 and 2027 imply year-over-year growth of 117.5% and 61%, respectively.

Image Source: Zacks Investment Research

PENN currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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