Markets & Finance

Merrill Lowers Ameristar Casinos to 'Neutral'


Merrill Lynch downgraded Ameristar Casinos (ASCA) to neutral from buy.

Analyst Rachael Rothman says Ameristar's 44 cents third-quarter earnings per share is below the 58 cents estimate. She downgraded on an increasingly promotional environment in St. Louis and Kansas City, where Ameristar competes head-to-head with Harrah's Entertainment's casinos. Rothman notes this trend is likely to continue when Argosy Gaming opens new a Kansas City casino in December.

She cut the $1.88 2003 earnings per share estimate to $1.72, and trimmed the $2.09 2004 estimate to $1.87. Despite the downgrade, she cites some positives: Ameristar's 2004 run-rate free cash flow remains substantial, the company has best-in-class assets, and the stock is reasonably valued. Rothman thinks the promotional environment next few quarters is likely to stabilize improving margins in the region.


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

Sponsored Financial Commentaries

Sponsored Links

Buy a link now!

 
blog comments powered by Disqus