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Pinnacle Entertainment Inc. Message Board

  • investora2z investora2z Oct 29, 2013 8:51 AM Flag

    Earnings will be a trigger

    Though there has been a slight correction, the stock has done well over the past few months. The stock has run up around 90% over the last one year. The Q3 earnings are going to be released soon, and that could be a trigger for the stock. The stock can gain more momentum if the earnings are better than expectations. Over the years, the losses have continued, and the topline growth has also not been too good. It has reported losses in the last three quarters, and the ttm loss stands at $125 million on a revenue of $1.23 billion. High leverage is common in the industry, with many of the big players having a negative bottom-line for many years. In addition, some of the bigger names are facing a multi-billion dollar lawsuit filed by MGT Capital Investments (MGT) for which Markman hearing has been fixed. A recent ruling in the case was largely positive for MGT, and it stayed proceedings against Caesars, MGM and Penn National Gaming pending completion of litigation against some other defendants. For Pinnacle, the level of debt will increase after the recent acquisition of Ameristar Casinos. The acquisition is expected to be cash accretive, and will help it increase its market share significantly. Analysts are largely positive about the stock. Though Zacks has downgraded the stock a few days ago. The price target is $28.20 which indicates that even they expect some upside from current levels. The rating is now neutral, compared to the previous rating of outperform. Barclays had increased the PT from $22 to $29 last month, and have an overweight rating. Deutsche Bank also increased the PT from $24 to $30 with a buy rating. JPMorgan Chase had a PT of $31 with an overweight rating on the stock. The consensus rating is Hold, and the average target price at $23.60.

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26.16-0.09(-0.34%)Sep 19 4:01 PMEDT

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