Merrill Lynch cuts GTECH Holdings (GTK

) estimates and keeps its buy rating.

Analyst David Anders cuts his 37 cents fourth-quarter earnings per share estimate to 33 cents and $1.53 fiscal 2005 (ending February) to $1.49. He notes his fourth-quarter estimate is below last year's level of 36 cents owing to a reduced lottery jack-pot activity, along with increased interest expense, and one less week in the quarter.

He cuts his $1.58 fiscal 2006 earnings per share estimate to $1.54, in-line with company's guidance, which reflects incremental expenses and negative carry on recently issued bonds, option expenses, and contribution from the Brazilian lottery.

Anders has a $30 target, and believes a higher valuation is warranted as the company continues to position itself for the longer-term.