PENN Continues To Witness Challenging Business Conditions

Analyst Dennis I Forst of KeyBanc Capital Markets maintains his "buy" rating on Penn National Gaming Inc (NASDAQ: PENN), while reducing his estimates for the company. The target price for PENN has been reduced from $37 to $29.

Penn National Gaming has reported its Q4 operating results inline with the estimates. PENN’s adjusted EPS for the quarter was short of the guidance and the estimates due to continued challenging business conditions, higher interest and development investments, the analyst says.

“Although we foresee a tough operating environment through 2010 and into 2011, we continue to suggest that value investors focus on the attractiveness of the Company's cash hoard, low leverage and free cash flow,” the analyst mentions. “Growth investors should closely watch the new project opportunities in the Company's pipeline,” the analyst adds. KeyBanc Capital Markets has reduced its EPS estimate for 2010 from $1.47 to $1.01.

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