Deutsche Bank Sees "Attractive Risk/Reward" in Regional Casino Stocks
The bank upgraded Penn Entertainment and Boyd Gaming to Buy, arguing the recent selloff was about the economy, not the casinos.
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Key points
- On Oct. 6, 2026, Deutsche Bank upgraded Penn Entertainment and Boyd Gaming from Hold to Buy.
- Analyst Steven Pizzella says the recent selloff came from macro worries and risk-off sentiment, not weaker company fundamentals.
- Price targets: Boyd to $99 from $98, Penn to $25 from $23.
- Soft August revenue was blamed largely on the calendar, with one fewer Friday in the month.
What Deutsche Bank said
Deutsche Bank has turned more positive on U.S. regional casino stocks after a stretch of weak share prices. In a note published on Oct. 6, the bank upgraded two of the group's biggest names, Penn Entertainment and Boyd Gaming, from Hold to Buy.
The reasoning is simple. Analyst Steven Pizzella argues that investors sold the sector because of the economy and a general mood of caution, rather than because the casinos themselves started doing worse. In his view, that gap between the share prices and the real business is what makes the risk and reward look attractive now.
Why the stocks fell in the first place
The note points to several pressures on regional gamblers' wallets: stubborn inflation, high gas prices and a soft job market. Regional casinos depend on customers who drive in from nearby, so anything that squeezes household budgets or makes the trip more expensive can weigh on sentiment.
August also looked worse than it really was. There was one fewer Friday in the month, and Fridays are among the busiest days for gaming revenue. Deutsche Bank says that calendar quirk explains much of the weakness in August gaming revenue, rather than a real drop in demand. The bank also says trends have been improving heading into October.
Penn: the sharpest pullback
Penn is the clearest example of the disconnect. Its shares dropped about 33% over three months, yet the projected rise in adjusted EBITDAR is only about 2% in the other direction, meaning earnings expectations have barely moved. Penn shares reportedly rose around 5% in pre-market trading after the upgrade.
Penn also carries a heavy debt load, so a Buy rating does not remove the risk. Investors who follow the stock will likely watch how its debt and its digital betting business develop alongside the regional casino trend.
Boyd: a smaller target change, same message
Boyd's target moved only a dollar, from $98 to $99, but the upgrade to Buy is the bigger signal. With the shares around $70, the new target implies a large gap to close if Deutsche Bank's view proves right.
Quick summary
| Company | Old rating | New rating | New price target |
|---|---|---|---|
| Boyd Gaming | Hold | Buy | $99 (from $98) |
| Penn Entertainment | Hold | Buy | $25 (from $23) |