MGM, Station, IGT get analyst upgrades

Friday, April 14, 2000 | 11:23 a.m.

Wall Street gaming analysts have issued upgraded earnings estimates for three major Nevada gaming companies.

This morning, Bear Stearns gaming analyst Jason Ader upgraded International Game Technology from "neutral" to "buy," setting a price target of $28 to $30 per share. He issued an earnings estimate of $1.54 per share for the year 2000.

"We believe the company is poised for a break-out given its improving fundamentals in the video market segment, its growing backlog for games in California, its new EZ Pay ticket system and the company's continued aggressive share repurchase program," Ader wrote.

Separately, Lehman Bros. gaming analyst Stuart Linde raised earnings estimates on Station Casinos Inc., setting a price target of $34 per share. Linde raised his earnings estimates from $1.74 per share to $1.90 per share in 2000, but maintained his "outperform" rating on the stock.

"We are raising our ... estimates for 2000 and 2001 to better reflect the strength of (Station's) operations in Nevada and Missouri and to be more in-line with the strong trends we are seeing in those markets," Linde said.

Deutsche Banc Alex. Brown gaming analyst Robin Farley also issued an earnings upgrade for MGM Grand Inc., raising her estimated first-quarter earnings from 32 cents per share to 38 cents per share, and her 2000 estimate from $1.27 to $1.33. Farley maintained her "buy" rating on MGM Grand's shares.

"We are raising our estimates on MGM Grand ... given the strength in the Las Vegas February revenue number released (Tuesday)," Farley wrote. The Nevada Gaming Control Board reported Tuesday that Strip gaming win rose 16.6 percent in February to $386.8 million.

This should result in a 9 percent increase in net revenues at the MGM Grand hotel-casino during the quarter, Farley said.