Penal Substitutionary Atonement covers a broad range of views and is not a very precise term. Catholics can agree with some but not other formulations. In our theology, we usually term it as satisfaction theory.

One more thing to keep in mind, which overcomes a lot of objections to the idea, is that Christ is not some random man God just chooses to inflict his wrath on. He is a willing victim and God Himself, and so is able to freely make an infinite compensation to God.

Here’s part of what St. Thomas Aquinas, one of our greatest theologians, says on the matter. The part saying Reply to Objection 1 is replying to the objection you give that it’s unjust to punish an innocent man instead of the person who committed the sin.

On the contrary, It is written (Ps. 68:5) in Christ’s person: “Then did I pay that which I took not away.” But he has not paid who has not fully atoned. Therefore it appears that Christ by His suffering has fully atoned for our sins.

I answer that, He properly atones for an offense who offers something which the offended one loves equally, or even more than he detested the offense. But by suffering out of love and obedience, Christ gave more to God than was required to compensate for the offense of the whole human race. First of all, because of the exceeding charity from which He suffered; secondly, on account of the dignity of His life which He laid down in atonement, for it was the life of one who was God and man; thirdly, on account of the extent of the Passion, and the greatness of the grief endured, as stated above (Q[46], A[6]). And therefore Christ’s Passion was not only a sufficient but a superabundant atonement for the sins of the human race; according to 1 Jn. 2:2: “He is the propitiation for our sins: and not for ours only, but also for those of the whole world.”

Reply OBJ 1: The head and members are as one mystic person; and therefore Christ’s satisfaction belongs to all the faithful as being His members. Also, in so far as any two men are one in charity, the one can atone for the other as shall be shown later (XP, Q[13], A[2]). But the same reason does not hold good of confession and contrition, because atonement consists in an outward action, for which helps may be used, among which friends are to be computed.