UPDATE: JP Morgan Downgrades Coinstar to Underweight on Valuation
JP Morgan downgraded Coinstar (NASDAQ: CSTR) from Neutral to Underweight and maintained a $51.00 price target.
JP Morgan said, "CSTR has traded up 3% (S&P500 up 1%) since issuing what we viewed as mixed 4Q results and weak 1Q guidance. The stock has traded through our Price Target, is fully-valued in our view, and now offers poor return prospects on what seems to be elevated risks associated with the Redbox business. We acknowledge that there are risks to going Underweight ahead of the company's analyst day on February 27th, but based on our recent discussions with management, we think the event will underscore the firm's commitment to the existing capex-heavy growth-strategy, and not to a more cash floworiented approach, sought out by more activist investors."
Coinstar closed at $53.53 on Friday.
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