Nomura Securities Starts Pinnacle Entertainment (PNK) at Buy

March 4, 2013 7:24 AM EST Send to a Friend
Get Alerts PNK Hot Sheet
Price: $24.60 --0%

Rating Summary:
    8 Buy, 7 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 12 | Down: 22 | New: 32
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Nomura Securities initiates coverage on Pinnacle Entertainment (NYSE: PNK) with a Buy. PT $18.00.

Analyst Louise Cheung comments, "We are initiating on Pinnacle Entertainment (PNK) with a Buy rating and a 12-month target of $18, implying ~30% potential upside from the March 1 closing price. What’s underappreciated by the Street is PNK’s pending acquisition of ASCA (Q3’13 closing), which should result in 25%+ EPS growth through 2015. Our positive thesis is driven by 1) margin expansion: ASCA’s EBITDA margins are ~600bps higher than PNK’s, and 2) unit growth: PNK gains a new Lake Charles project, a market that we believe is undersupplied. We expect PNK to generate FCF of ~$6.50/share in 2014 when combined with ASCA, an implied ~46% FCF yield. F13E/F14E operating EPS is $0.96/$3.41"

For an analyst ratings summary and ratings history on Pinnacle Entertainment click here. For more ratings news on Pinnacle Entertainment click here.

Shares of Pinnacle Entertainment closed at $14.02 yesterday.


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