investora2z Tuesday, 10/29/13 09:09:37 AM Re: None Post # of 45 The stock has appreciated 90% over the last one year. The upcoming Q3 earnings will determine the short term trend of the stock. In Q2'13, the company had posted around 6% growth in the top line, and the losses had declined significantly on a sequential basis. It is important for the company to post a good set of numbers because negative surprises can lead to profit booking. In fact, the stock has already come down a bit from the high made earlier this month. Like most of the companies in the sector, the company has been mostly reporting losses over the last few years. Even the topline growth has not been too robust. The acquisition of Ameristar will help it double in size and increase its market share significantly. However, it is expected to increase the debt as well. Leverage is high in the entire industry, and is also a concern for Pinnacle. The sector faces several challenges. Discretionary spending depends on improvement in the economy, and organic growth in revenues is linked to that. In addition, some of the bigger names are facing a multi-billion dollar lawsuit filed by MGT Capital Investments (MGT) for which Markman hearing has been fixed. A recent ruling in the case was largely positive for MGT, and it stayed proceedings against Caesars, MGM and Penn National Gaming pending litigation against some other defendants. For Pinnacle, the Ameristar acquisition is expected to be good for the long term. Though Zacks has recently downgraded the stock to neutral, analysts are largely positive about the company. The price target given by Zacks is $28.20. Barclays has a PT of $29 with an overweight rating, while Deutsche Bank has $30 with a buy rating. JPMorgan Chase has a target price of $31, and an overweight rating. The consensus rating for the stock is Hold, and the average target price around $23.60.