Goldman Sachs Lowers EPS Estimates on MGM For FY10
Goldman Sachs lowered EPS estimates and target price for casino operator MGM Mirage (MGM: 11.10 0.00%) following the news of another disappointing quarter.
Last week the gaming company released fourth quarter 2009 financials at a loss of $433.90 million or $0.98 a share, after absorbing $1.2 billion in write downs the loss narrowed to $0.21 a share.
The investment firm maintains a “Buy” rating given the potential for Vegas to recover with strong corporate travel trends and the news that MGM will amend and extend its revolving credit facility and pursue other liquidity events to strengthen the balance sheet.
However Goldman lowered its 12-month price target from $16 to $14.50 and raised its loss estimated for FY10 from a loss of $0.53 to a loss of $0.71.
Goldman anticipates MGM Mirage to continue to post financial losses until 2012 under continued “intense pressure” on room rates.
MGM stock dropped $0.77 on Friday to $10.86 from Thursday’s closing price of $11.63.
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