Bull Notes Push PENN Higher Before Earnings

The stock is climbing back up toward its recent record high

Deputy Editor
Feb 2, 2021 at 10:23 AM
facebook twitter linkedin


Penn National Gaming Inc (NASDAQ:PENN) is up 4.4% at $108.59 at last check, after a pair of bull notes in the form of price-target hikes. Stifel, noting that the stock seems compelling long-term despite the casino industry's near-term headwinds, adjusted its price target to $118 from $100. Furthermore, Jefferies raised its price objective to $91 from $74, while expecting little surprise from the company's fourth-quarter earnings, due out before the open on Thursday, Feb. 4. 

Ahead of these earnings, the options pits are pricing in a post-earnings swing of 13.4%, regardless of direction. This is much higher than the average 6.1% move from the company's last eight earnings reports. On the charts, PENN is already trading not too far from its Jan. 25 record high of $111.02.

Options traders have been fiercely bullish. Penn National Gaming stock's 50-day call/put volume ratio of 3.03 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 97% of all other readings from the past year. This shows a strong penchant for long calls in the last 10 weeks. 

Now may not be a bad time to weigh in on these options either, per the stock's Schaeffer's Volatility Index (SVI) of 92%, which stands higher than just 13% of all other readings in its annual range. This implies that options players are pricing in relatively low volatility expectations at the moment. 

Taking a look at sentiment amongst the brokerage bunch, analysts are split on PENN. Of the 14 analysts in coverage, seven carry a "strong buy" rating on the stock, with the remaining seven a "hold" or worse. Meanwhile, the 12-month consensus price target of $97.07, coming into today, is an 10.6% discount to current levels. 

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners