Merrill Lynch keeps buy on Argosy Gaming (AGY).
Analyst David Anders says performance at the Lawrenceburg riverboat casino in January (gaming revenue rose 17%) ran well above his estimates, and he thinks the trend continued through February. For 2004, he had modeled in 2% same-casino revenue growth, which now is revised upward to 6%.
In addition, Anders says the newly remodeled and expanded Kansas City riverboat has been running ahead of his estimates. He raised the $2.25 2004 earnings per share estimate to $2.27, and uppped the $2.50 2005 estimate to $2.60 to reflect performance of these two properties. He also raised the $32 target to $39, which is based on an enterprise value-to-205 EBITDA multiple of just under 6.5.