PENN Entertainment, Inc.: First Look at 2Q26 Beat and FY26 Raise

Research evidence excerpt

J P M O R G A N

North America Equity Research

06 August 2026

PENN Entertainment, Inc.

First Look at 2Q26 Beat and FY26 Raise

Overweight

PENN, PENN US

Price (05 Aug 26):$19.62

Gaming & Lodging

This was one of the best prints from PENN in years. Land-based EBITDAR of

$517m +4% vs. JPMe/Street and Interactive was in-line w/ guidance, a result that

was likely better than many feared given hold concerns. Further, PENN raised its

FY26 retail EBITDAR guidance MP by $31m, something we have not seen PENN

do in quite some time. Of the $31m increase, we attribute ~$22m to 2Q upside (we

think PENN was expecting ~$495m), with the other $9m reflecting strong 3QTD

trends and a favorable outlook. All other elements of the guide were left

unchanged, thus implying PENN should generate FCF/sh of $3.40 in 2026, which

at current share price levels, equates to an undemanding 17% FCF yield.

Land-based EBITDAR of $517m beat JPMe/Str’s $498m, reflecting upside

revenues (+1% better) and margins (34.4% vs. JPMe/Str’s ~33.5%). We rarely

talk about y/y growth re: Regional metrics, but it’s apropos here as PENN sees

return from recent investments; PENN’s land-based revs were +4% y/y, while

adj. EBITDAR was +6% y/y; margins were +60bps y/y, and flow-through was

a very strong 48%; ex-development projects, revs/EBITDAR were +2/4% y/y.

PENN noted that it continues to see encouraging retail trends through July, as

nine properties set quarterly records for Revenue/EBITDAR, and it’s seeing

strong growth in mid/upper-worth segments and unrated revenues. Of the

$19m EBITDAR upside vs. our estimates, South and Midwest were +$10m

each, and Northeast was +$3m, offsetting West that was -$4m. Mgmt.

highlighted meaningful contributions from mid and high worth customer

segments.

Interactive EBITDAR loss of -$10m was similar to our/Str’s -$10m/-11m,

while revs of $349m included$164m direct (vs. JPMe $177m) and $186m of

pass-thrus (JPMe $193m). The revs ex-tax gross ups of $164m were -8% y/y,

w/ iCasino NGR +2% y/y and OSB NGR -22% y/y (all other +5%). PENN

noted U.S. standalone iCasino strength continued with q/q and y/y growth,

while Ontario continues to gain momentum, with strong OSB rev growth and

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