Prudential analyst downgrades MGM Grand, Mandalay

Friday, May 26, 2000 | 10:58 a.m.

Prudential Securities gaming analyst Joe Coccimiglio slashed his ratings on MGM Grand Inc. and Mandalay Resort Group, saying the stocks had reached their expected price targets.

Coccimiglio downgraded MGM Grand from a strong buy to a hold, and Mandalay from a strong buy to accumulate. He said the rating downgrade was related to the stock's rapid appreciation in the last few months, rather than concerns over each company's future prospects.

Since Coccimiglio issued strong buy ratings on both stocks in March, Mandalay has risen 69 percent and MGM Grand is up 74 percent.

Coccimiglio said he considered restoring his strong buy rating on Mandalay after the company beat earnings expectations for its first quarter by 45 percent last week.

"I want to see a few quarters of meeting or beating earnings," Coccimiglio said, calling Mandalay's track record "erratic." Still, the strong first quarter prompted Coccimiglio to raise his Mandalay target price from $25 to $30 per share, representing a 37 percent premium over current levels.

Coccimiglio also downgraded WMS Gaming from strong buy to accumulate, and Argosy Gaming from accumulate to hold. However, he maintained his strong buy ratings on Harrah's Entertainment Inc. and Park Place Entertainment Corp., saying Harrah's in particular still has strong appreciation potential.

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