Goldman Sachs upgraded WMS Industries (WMS) to market perform from market underperform.
Analyst Steven Kent says since May 1, the stock has fallen more than 30%, vs. the S&P 500's 18% drop. He says he had based his sell assessment on the belief that the company's software problems would keep it from growing earnings. He upgraded now because: 1) the stock has fallen; 2) recent channel checks indicate some managers are becoming more receptive to the company's products; 3) the Mississippi gaming authority has approved a new WMS system; 4) he suspects WMS will have good news when it posts fourth-quarter earnings per share on August 14.
He also notes the company will be introducing new games in September. He has a $0.25 fiscal 2002 (June) earnings per share target and $0.07 for fiscal 2003.