What: Shares of Penn National Gaming, Inc (PENN 7.04%) fell 12% in January according to S&P Capital IQ data. Analyst downgrades hit the stock, and gaming stocks dropped in general.

So what: Analysts at Merrill Lynch downgraded the stock on January 12, giving it a price target of $17 and marking the worst day of the month for Penn National. The concern was that the U.S. economy would take a turn for the worst in 2016, hurting all regional gaming stocks, including Penn National.

For now, the company has only said that it reiterated fourth quarter and full-year guidance for 2015, which call for full year revenue of $2.79 billion and adjusted EBITDA of $754.5 million. 

Now what: The gaming industry is one of the more volatile on the stock market, and with January starting on a sour note it's no surprise that gaming stocks didn't fare well during the month. Penn National has actually fared decently considering the decline competitors in Asia have experienced, and it doesn't appear right now that the U.S. economy is set for a major pullback this year.

With total debt of $1.67 billion and a market cap of $1.08 billion, the stock looks cheap if it can retain even a little bit of growth in 2016. January's drop wasn't a sign of weakness, but rather the stock reacting to the market and an analyst downgrade.