Analyst Sees Potential For WMS As New Markets Open
J.P. Morgan analyst, Joseph Greff told his clients that weakness in the gaming sector could represent a buying opportunity for investors, since shares of WMS Industries (WMS: 38.74 0.00%) have fallen significantly from its January high.
While, WMS reported record results in its second fiscal quarter, shares of the gaming company have dropped 16%.
Greff adds that the stock price decline “presents an opportunity in front of revenue acceleration starting in the calendar of the second quarter of 2010.”
WMS is poised for growth over the next two years as they wait for regulatory approval to enter the Australia gaming market, where WMS executives say there is significant opportunity.
WMS is also focusing on Illinois as they move forward with a gaming expansion that will allow a tenth casino in the state.
Brean Murray also upgraded his rating on WMS stock to a “buy” on Wednesday with a target price of $51.00.
“With the potential for WMS’s participation base to increase following flattish results over the past two quarters and with the most leverage to industry replacement sales, which should dominate the sales landscape for the next few quarters, we view the recent 20% slide in WMS shares as a compelling investment opportunity.”
WMS opened trading today at $39.42 up $1.43 from yesterday’s close of $37.99.
WMS stock reached a high of $44.21 in mid January and a low of $36.94 at the end of the month.
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