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Stock upgraded by Salomon

Friday, Jan. 18, 2002 | 10:52 a.m.

Salomon Smith Barney upgraded the stock of Park Place Entertainment Corp. on Thursday, citing the company's relative value to the rest of the gaming sector and a rebound in business trends.

Gaming analyst Michael Reitbrock assigned an outperform rating to Park Place, up from neutral. He raised his price target from $9 to $13.

Reitbrock noted that Park Place shares remain down about 16 percent since Sept. 11, while the three other major Las Vegas casino operators -- Harrah's Entertainment Inc., MGM MIRAGE and Mandalay Resort Group -- are now above pre-Sept. 11 levels. As a result, Reitbrock said, Park Place now trades at a multiple of 7.5 times expected 2002 cash flow, well below MGM MIRAGE and Harrah's.

In addition, Reitbrock expressed confidence "major gaming markets are returning to health ... operating performance prior to 9/11 was very strong and indicates room for continued improvement."

"(Park Place) remains a story in transition without a clear catalyst, leading to it having been overlooked by many investors," Reitbrock wrote. "Various development opportunities, CFO hiring ... could increase the company's profile."

Park Place closed Thursday at $9.90, up 24 cents.

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