The Goldman Sachs Group, Inc.

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The Goldman Sachs Group, Inc. stock analysis GS overview
Bullish +75

Goldman Sachs says buy this gambling stock, sees it adding to its sharp 2026 gains - CNBC

📈 Goldman Sachs initiates Penn Entertainment (PENN) with a Buy rating and sets a $26 price target.

💰 The bank sees PENN as having one of the most attractive free cash flow yields in the gaming sector.

🚀 Analysts project recurring free cash flow will exceed $4 per share by 2028.

🎲 Regional gaming revenue grew 7.2% in Q3 last year, outpacing U.S. GDP growth of 3.9%.

📊 Penn Entertainment shares are up 43% year-to-date amid a sector revival.

🤝 M&A activity is currently putting a floor under the valuation for regional gaming stocks.

👥 Of 21 analysts covering Penn, 12 hold Buy or Strong Buy ratings according to LSEG data.

Bullish Signals
  • Goldman Sachs initiated coverage with a Buy rating and a $26 price target implying 23% upside from recent prices.
  • The company is expected to clock recurring free cash flow of more than $4 per share by 2028.
  • Penn Entertainment shares have risen 43% year-to-date as money flows into the regional gaming sector.
  • Commercial gaming revenue in the U.S. grew 7.2% in Q3, significantly outpacing the country's GDP growth.
  • Analyst Lizzie Dove identifies PENN as one of the most compelling risk/rewards in the gaming sector due to new projects and interactive segment improvements.
Full Analysis
Goldman Sachs has initiated coverage on Penn Entertainment (PENN) with a Buy rating and a $26 price target, suggesting approximately 23% upside from recent closing prices. Analyst Lizzie Dove highlights the stock as a compelling risk/reward opportunity within the gaming sector, driven by an inflection point in regional business operations and improving performance in interactive gaming segments. The investment bank projects that Penn Entertainment is poised to generate recurring free cash flow exceeding $4 per share by 2028. This outlook is supported by a broader resurgence in the regional gaming industry, where commercial revenue grew 7.2% in the U.S. during the third quarter of last year, significantly outpacing the nation's GDP growth of 3.9%. Shares of Penn Entertainment have already appreciated 43% year-to-date as capital flows into the regional gaming space increase. The analyst notes that merger and acquisition activity is providing a valuation floor, while current earnings revisions offer further potential for the stock to move higher in alignment with Street consensus.