Deutsche Bank Upgrades Penn Entertainment and Boyd Gaming to Buy

Deutsche Bank upgraded regional casino operators Penn Entertainment and Boyd Gaming from hold to buy on Tuesday. The investment bank raised its price target for Penn Entertainment to $25 from $23 and increased the target for Boyd Gaming to $99 from $98.

Analysts attributed weak gaming revenue in August to calendar effects, including the shift of Labor Day and one fewer Friday, rather than a fundamental decline in consumer demand. The bank noted that recent sell-offs in the sector were driven by broad market concerns and not by deteriorating company fundamentals.

Deutsche Bank expects more favorable calendar conditions in September and October to serve as near-term catalysts for the stocks. Additionally, the bank maintained a buy rating on Red Rock Resorts with a $73 price target, citing stable fundamentals within the Las Vegas locals market.