business

Morgan Stanley Downgrades Aztar

Analyst Celeste Mellet-Brown believes the resort and casino operator's strength from expansion plans and potential takeover conjectures are already priced into the stock

Morgan Stanley Downgrades Aztar

Analyst Celeste Mellet-Brown believes the resort and casino operator's strength from expansion plans and potential takeover conjectures are already priced into the stock

Morgan Stanley downgrades resort and casino operator Aztar Corp. (AZR ) to underweight from equal-weight.

Analyst Celeste Mellet-Brown says the stock is priced for perfection and has little potential upside from current levels.

She says the two main catalysts for stock price - strength this summer from Atlantic City expansion and conjecture about potential takeover - are already priced into the stock.

Mellet-Brown believes operating results will likely improve throughout year, but has concerns related to valuation. She prefers to own other names with more attractive return.

She is discounting her $33 year-end 2006 target back to present using 10% discount rate implies fair value of $29 per share.