Bank of America downgraded Caesars Entertainment and PENN Entertainment
Bank of America Securities expressed hesitancy towards a couple of casino staples earlier, downgrading both Caesars Entertainment Inc (NASDAQ:CZR) and PENN Entertainment Inc. (NASDAQ:PENN) to "neutral" from "buy."
According to The Fly, the analyst in coverage believes growth momentum is leveling out, after casino stocks, especially regional operators, were the largest "over-earners" versus pre-COVID.
Brokerage Bunch Bullish on CZR
At last glance, CZR is down 3.2% to trade at $50.90. The shares yesterday briefly traded at $55.51, their highest level since May, though they are down 45.3% in 2022. Despite this lofty deficit, the majority of analysts were still bullish on the casino stock coming into today, with 10 of 12 recommending a "strong buy." This leaves plenty of room for more bear notes to roll in.
Bank of America Securities slashed Caesars Entertainment stock's price target to $55 from $60, too, but the 12-month consensus target price still stands at $67.43 -- a 32% premium to CZR's current perch, indicating additional price-target cuts may be on the horizon.
PENN Still Boasts Some Support
PENN Entertainment stock, meanwhile, is 2.3% lower to trade at $34.22. The security is 34.2% lower year-to-date, but its 60-day moving average has provided support in recent weeks.
Bank of America Securities cut its price objective on PENN to $40 from $45, while the 12-month consensus target price of $47.18 is a 38% premium to the security's current levels. Coming into today, the brokerage bunch was mostly optimistic on PENN, with nine of 15 firms in coverage calling it a "strong buy."