UPDATE: Stifel Nicolaus Reduces PT to $9 on Asia Entertainment & Resources on Updated Forecasts
Stifel Nicolaus reiterated its Buy rating on Asia Entertainment & Resources (NASDAQ: AERL) but reduced its price target from $12 to $9 a share.
Stifel Nicolaus noted, "While the Macau market has slowed, AERL believes the market could reaccelerate in 2H12 (especially 4Q12) and could surprise to the upside. We are severely cutting our EBITDA/EPS forecasts to account for a slower Macau VIP market and tighter lending to AERL's junket agents. We are lowering our price target to $9 (-$3, 5.5x FY13E EBITDA). Even after severely cutting our estimates, we still believe AERL shares are attractive given their inexpensive valuation, 11% dividend yield, $3 in net cash and 15% FCF yield.
Asia Entertainment & Resources closed at $3.45 on Friday.
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