PENN Entertainment heads into its June 16 earnings call with short sellers pulling back sharply and the Street collectively lifting price targets — a setup that looks more constructive than the stock's flat one-month performance suggests.
The most striking move this month is the short interest unwind. Bears have cut their position by more than 21% over the past month, with short interest falling from roughly 21.5 million shares in late April to 16.7 million today — dropping the float percentage from around 16.5% to 12.6%. That is still a meaningful short position, but the direction of travel is unambiguous. Short sellers were heavy into PENN through mid-April, peaked near the earnings catalyst on April 23, and have been covering steadily since. The borrow market reflects none of the squeeze dynamics that occasionally follow these unwinds: cost to borrow is near-zero at 0.43%, and availability is extraordinarily loose at over 1,160% of short interest, meaning new shorts could easily rebuild if the thesis reasserted itself. The lending pool is not under any pressure.
Options positioning is similarly calm. The put/call ratio is running at 0.48, barely above its 20-day average of 0.47 and well within normal range — a z-score of just 0.44. There is no hedging spike ahead of earnings, no defensive scramble. The options market is essentially pricing a business-as-usual run into the June 16 release, which stands in mild contrast to the elevated short interest level that persists despite the recent unwind.
The Street has become steadily more constructive. Almost every firm that touched the name in April raised its target after the Q1 print, which delivered a remarkable +16.7% one-day move on April 23. JP Morgan, Barclays, Mizuho, and Stifel all bumped targets to the $22–$24 range. More recently, Macquarie raised its target to $23 (from $22) on May 19, keeping its Outperform rating. The notable outlier is Morgan Stanley, which lifted its Equal-Weight target to $17 — essentially flagging the current price as fair value. The mean target across the group is $20.33, implying roughly 19% upside from the $17.06 close. Bulls point to PENN's 43-property retail network, expanding iCasino share in Michigan, and improving EBITDAR margins. Bears counter that promotional spending runs below market averages in several states, sequential digital share gains have been uneven, and a re-rating of the retail multiple requires GGR improvement that remains uncertain. EV/EBITDA around 7x and a P/E near 13.6x are below historical averages for the sector, which is either a value opportunity or a fundamental discount, depending on the digital segment's trajectory.
Institutional ownership adds texture. BlackRock added 284,600 shares to reach 12.3% of the company as of April 30. Goldman Sachs added over 1.4 million shares to reach 3.1%. Citadel built a new position of 2.6 million shares. Balyasny initiated a fresh stake of 2.4 million shares. These are not passive index flows — several are active managers taking new or materially larger positions in the same window that short sellers were covering. HG Vora trimmed by 575,000 shares, the main institutional seller of note. The net institutional picture looks more like accumulation than distribution. On the insider side, CEO Jay Snowden sold 108,000 shares in March at $14.70 as part of a routine award-and-sell cycle — with the stock now at $17.06, the sale looks early, though the significance rating on that trade was minimal.
The ORTEX short score has eased slightly over the past two weeks, from 54.4 to 53.3, consistent with the covering trend. Factor scores flag strong EPS surprise (90th percentile) and strong 90-day EPS momentum (91st percentile), though 30-day EPS momentum has slipped to the 20th percentile — a possible signal that near-term estimate revisions have stalled after the April beat. Among peers, CZR gained 2.8% on the week and MGM added 3.7%, broadly in line with PENN's 5.8% rise. DKNG, the closest digital pure-play comparable, fell 7.6% — a reminder that the online gaming subsector is trading on a different narrative than PENN's hybrid retail-and-digital story. CHDN dropped 5.5%, the weakest in the peer group.
The June 16 print is the next hard catalyst. With short interest still at 12.6% of the float, the Q1 reaction (+16.7%) fresh in memory, and the borrow market wide open, the setup into results is less about whether bears are positioned aggressively — they are clearly reducing — and more about whether the digital segment's sequential share trends can satisfy a Street that has already moved targets higher once this year.
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