CEC Entertainment Earnings Disappoint, Sterne Agee Maintains Buy (CEC)CE

CEC Entertainment

reported EPS of $0.35, well below consensus of $0.45. Sterne Agee said, "Given the shortfall in 2Q, we are lowering our pro forma EPS estimate from $2.83 to $2.66 (excl. the $0.13 charge from 2Q). In addition, we are reducing our 2011 EPS estimate from $3.11 to $3.00, reflecting a slightly lower SSS assumption." "We are maintaining our BUY rating based on the following:1) CEC holds a dominant market share position in the child entertainment segment; 2) The Company has several sales catalysts in place which include store expansions, remodels and the roll-out of the 'Ticket Blaster'; and 3) CEC has an attractive FCF yield of 7.5% and $200 million share repurchase authorization." CEC is rated Buy with a price target of $43. Shares are currently trading at $34.55.