Janney Montgomery Scott Upgrades Ameristar Casinos (ASCA) to Buy; Favorable Risk/Reward

November 9, 2009 7:51 AM EST

Janney Montgomery Scott upgrades Ameristar Casinos (Nasdaq: ASCA) to Buy from Neutral. Price target $20.

Janney analyst says, "At the current price we believe ASCA presents a favorable risk/reward equation for investors. We expect Ameristar to generate strong free cash flow in 2010 and 2011, as it does not have any future capital projects. We are forecasting free cash flow of over $2 per share in 2011. We expect Ameristar's primary use of cash to be paying down debt. We see the opening of the hotel at the company's Black Hawk property as a positive catalyst and expect the property to take share in the market. In addition, we see delays in Kansas as a positive for the company's Kansas City property in the near to intermediate term. While our BUY rating is based on fundamentals, ASCA is the most likely takeout in our group, and we think this will help to provide a floor for the share price. We see downside risk of 10% from here and upside of over 25%."

To see more analyst ratings on ASCA Click Here.

Ameristar Casinos, Inc. develops, owns, and operates casinos and related hotels in the United States.

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