UPDATE: JP Morgan Downgrades WMS Industries to Underweight on EPS Decline

JP Morgan cut its rating on WMS Industries

from Neutral to Underweight and reduced its price target from $21 to $14. JP Morgan noted, "We view WMS as entering another phase of declining EPS and ROICs (following a period of optimistic guidance and mixed execution) over the next 12 months given (1) competitors' gaming operations product negatively impacting WMS with a combination of limited installed base growth and declining yields, (2) heightened competition and adverse mix (VLTs) driving declining pricing/ASP in product sales (not good for margins), (3) limited new U.S. market/property expansion, (4) accelerating operating expenses related to unproven product (interactive), and (5) our unchanged views of very modest North American replacements." WMS Industries closed at $18.26 on Monday.