Pinnacle Entertainment Shares Could Dip Ahead Of Casino Opening

Jefferies feels that Pinnacle Entertainment's

announced increase in its budget for its Baton Rouge casino and hotel development could weigh on the shares in the immediate term. Although it is believed the property could assume a leadership position over time and prove to be a positive catalyst for the stock. On September 27th, PNK announced updates to its plans for a Baton Rouge casino and hotel, which, subject to approval from the Louisiana Gaming Control Board, is anticipated to open in December 2011. The increase in the budget is to $357M from $259M and increases the scope of the project. Although it could modestly cannibalize PNK's Boomtown New Orleans property, Jefferies believes the company's updated plans for Baton Rouge should serve as a longer term positive catalyst for the stock, given its success in other areas of the competitive Louisiana gaming market. PNK is trading about 2% lower at $10.71