Wells Fargo Resumes Coverage on Ameristar Casinos (ASCA) at Market Perform; Strong Assets And Free Cash Flow, But Estimates Below Consensus

Wells Fargo resumes overage on Ameristar Casinos (NASDAQ: ASCA) with a Market Perform. PT range $16-$19.00.

Wells analyst says, "Certainly, there are some positives: (1) an excellent set of regional assets, (2) strong FCF reducing leverage; (3) less impact from new competition than other companies; and (4) optionality in Massachusetts. However, we rate the shares Market Perform based on the following: (1) low revenue and earnings growth; (2) the fact that our FY2012 Net EBITDA estimate of $374mm is 4% below the consensus; (3) ASCA is likely to see some impact from new competition; and (4) most of ASCA's FCF is likely to reduce leverage. With the stock trading at 6.7x
our 2012 base case Net EBITDA estimate, we believe the stock is likely to trade in line with the market until there is more clarity on the economic outlook and competition and disruptions at several of ASCA's properties."

For an analyst ratings summary and ratings history on Ameristar Casinos click here. For more ratings news on Ameristar Casinos click here.

Shares of Ameristar Casinos closed at $17.62 yesterday.

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