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Stifel Nicolaus initiates its coverage on Asia Entertainment & Resources
AERL with a Buy rating and a price target of $12 per share as the company remains well positioned to ride Macau gaming headwinds.
Stifel Nicolaus says, "While we expect Macau gross gaming revenue (
GGR) growth to
slow in the quarters ahead, particularly within the VIP segment, we believe AERL remains well positioned to deliver rolling chip turnover (RCT) growth that outpaces RCT growth in the broader Macau VIP market. Although AERL currently only promotes three rooms with a combined 27 tables, we believe management's focus on the high end of the VIP market should allow the company to turn over its cage capital at a faster rate than its competition, due to larger average bet sizes and shortened collection periods."
AERL closed at $5.80 a share on Monday.
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