Analyst confirms company’s rating

Friday, June 25, 1999 | 11:07 a.m.

Mandalay Resort Group stock rose 12.5 cents to $21.25 a share today after a prominent gaming analyst reiterated his buy rating on the company despite a slight cut in its second-quarter earnings estimate.

Some securities analysts have trimmed their per-share earnings estimates for the quarter ending July 31 to 29 cents from 32 cents for the company formerly known as Circus Circus Enterprises Inc.

"We hadn't expected a blow-away quarter due to slower convention traffic and low table hold at Mandalay Bay," said Harry Curtis of BancBoston Robertson Stephens, referring to the company's new $1 billion Las Vegas Strip resort.

"Nevertheless, we believe business trends remain solid, and the company is comfortable with the consensus of 32 cents earnings per share," Curtis said.

"We've set a 12-month price target of $31 a share and believe the stock is inexpensive at current market costs," he said. "The stock trades at 6.9 times projected calendar 2000 EBITDA of $585 million, and 15 times estimated 2000 earnings per share of $1.50."

EBITDA, or earnings before interest, taxes, depreciation and amortization, is a widely used measure of financial performance. Most large-cap gaming companies are trading at a higher EBITDA multiple.

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