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Canaccord Genuity Morning Coffee on Bally Technologies (BYI): Cherry...Cherry...BAR!

April 11, 2011 10:29 AM EDT
Get Alerts BYI Hot Sheet
Price: $83.27 --0%

Rating Summary:
    4 Buy, 11 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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Canaccord Genuity Morning Coffee on Bally Technologies (NYSE: BYI): Cherry...cherry...BAR!

Canaccord analyst says, "Shares of Bally’s fell after the slot machine maker cut its earnings forecast for 2011 due to a shift to a mix of lower margin devices. CEO Richard Haddrill said, “Short-term market conditions remain difficult, with the timing of large systems implementations becoming more challenging to predict.” The company no longer expects to hit its revenue target of $205-215 million for the year and also cut its earnings forecast from $2.00-2.15 per share to $1.82-1.95. The company also announced plan to repurchase $550 million worth of stock, including $400 million in a Dutch tender offer at no more than $40, but no less than $34.50 per share. The disappointing guidance prompted Credit Suisse to move from a bullish to neutral stance on the stock. The brokerage says that while there is no denying that North American slot industry is seeing soft demand, they think Bally may be more at risk with lowering performing products relative to IGT (NYSE: IGT) and WMS (NYSE: WMS), whom Credit Suisse prefer in the industry. The brokerage says that while shares look cheap, and the company is well positioned for the long term, continued earnings disappointments and negative momentum have them moving to the sidelines. Regarding the plans to repurchase shares, Credit Suisse believes it will only serve as a backstop for shares."


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