UPDATE: Credit Suisse Downgrades Pinnacle Entertainment to Underperform on Acquisition-Related Risks
Credit Suisse downgraded Pinnacle Entertainment, Inc. (NYSE: PNK) from Neutral to Underperform and lowered the price target from $17.00 to $15.00.
Credit Suisse commented, "While ASCA is a strategic fit for PNK, we see a number of risks, including 1) the emergence of competing bids which drive up the price, 2) potential regulatory requirements to dispose of a St. Louis asset, 3) relatively modest synergies (beyond corporate), 4) and the return of a risky and potentially low-return project in Lake Charles. While pro forma leverage of 6x can be managed with low financing costs (plus FCF for deleveraging), it will leave PNK with limited room for error and at risk should still weak consumer trends decelerate meaningfully."
Pinnacle Entertainment closed at $16.43 on Monday.
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Tags: Credit Suisse