Morgan Joseph Reiterates a 'Buy' on Bally Technologies (BYI); Sun Int'l Signs BYI Systems Contract

Morgan Joseph reiterates a 'Buy' on Bally Technologies (NYSE: BYI), PT $47.

Morgan analyst says, "After taking into account a discount (we probably went a little too high to be conservative), we believe the installation side of the contract could be worth $36mm to $40mm and $0.27 to $0.37 in revenue and EPS, respectively. We believe the rollout will likely take place over 18 months. We expect a rather even implementation over that time frame given that Bally and Sun plan to train the Sun property level employees on the BYI system product before they go-live in order to ensure as near a flawless rollout as possible. As such, we believe dividing our revenue and EPS estimates for the deal by six (18-month rollout) provides a good picture of the incremental revenue and EPS outlook on a quarterly basis. We calculate that the recurring revenue component of the contract should be worth $0.03 to $0.04 a year in EPS. Again, this deal is not expected to add to revenue and EPS until F1Q13."

For more ratings news on Bally Technologies click here and for the rating history of Bally Technologies click here.

Shares of Bally Technologies closed at $40.33 yesterday.

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