JPMorgan's Ameristar (ASCA) Upgrade Can't Help Other Casino Stocks Today (LVS, MGM, WYNN)
Despite a JPMorgan upgrade of Ameristar Casinos (Nasdaq: ASCA) earlier, casino stocks are getting slammed today as trader fears that the global economy has not yet bottomed have reemerged. The concerns were reignited this morning on news that the World Bank cut its global economic growth estimate from -1.7% to -2.9%.
JPMorgan moved its investment rating on shares of Ameristar from Neutral to Overweight, citing "more reasonable near-term investor expectations" for Ameristar's regional gaming markets. The firm also noted Ameristar's better-than-expected gross gaming sales results for the Q2-to-date period, as well as the casino's "ability to deliver peak/close-to-peak margins given sustained rational behavior from its competitors". JPMorgan also boosted its price target on Ameristar from $20 to $24.
With shares of Ameristar up nearly 4% on the upgrade today, the firm's price target suggests potential upside of nearly 28% from current levels.
Other casino stocks have continued trading lower all day:
- Las Vegas Sands (NYSE: LVS) is now down 8.8% after opening about 2.5% lower. Shares of Las Vegas Sands most recently traded at $7.42.
- MGM MIRAGE (NYSE: MGM) currently down 9% to $5.98. The stock opened down just 2.2%.
- Wynn Resorts (Nasdaq: WYNN) stock is down 6.4% to $34.48. Shares of Wynn opened about 1.8% lower.
- Melco Crown Entertainment (Nasdaq: MPEL) shares have fallen 10% to $4.80 today, but are not continuing to push to fresh session lows, unlike the other major casino names.
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