BancBoston Robertson Stephens Reiterates Buy Rating on HET
SAN FRANCISCO, Aug. 17 /PRNewswire/ -- The following is being issued by BancBoston Robertson Stephens, a member of the National Association of Securities Dealers, CRD number 41271:
BancBoston Robertson Stephens senior gaming and lodging analyst Harry Curtis, a 1999 Wall Street Journal All-Star Analyst, today reiterated his Buy rating on Harrah's Entertainment, Inc. (NYSE: HET). Harrah's Entertainment is the most diversified gaming company in the casino industry.
"We are reiterating our Buy rating on Harrah's Entertainment," said Curtis. "The company announced that it has offered to acquire Players International for cash and assumption of debt in a transaction valuing the company at approximately $400 million.
"We believe Harrah's would benefit from this acquisition by:
1. consolidating the Players and Harrah's operations in Maryland Heights,
2. gaining access into the Houston market with the Players Lake Charles,
La., riverboat and
3. gaining access into additional markets in Kentucky, Illinois and
Tennessee with the Players Metropolis, Ill., riverboat casino,"
said Curtis.
"If the acquisition is successful, our 2000 earnings-per-share estimate of $1.80 would increase by $0.05, remaining well above consensus estimate of $1.69," said Curtis.
"In addition to the combined cost savings from operations, we estimate that Harrah's will generate $861 million in EBITDA during 2000, versus our prior estimate of $773 million," said Curtis. "Our $32 price target is based on a 7.5 times 2000 EBITDA multiple and long-term debt ending of $2.3 billion. We strongly reiterate our Buy rating on shares of Harrah's Entertainment based on the 42 percent upside potential."
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