Citi downgrades TTS to HOLD
March 31, 2010
Citi has downgraded TTS (HOLD, price target $2.60) citing headwinds to outperformance. The broker also cited weaker spending margins in Victorian gaming.
Citi said spending trends in Victorian gaming are also weak in early 2H10. Going forward Citi said the market would continue to lag given the absence of stimulus payments.
TTS lags TAH in share in this market, and given regulatory delays in opening new venues and relocating machines, is unlikely to claw back share in the twilight years of the license.
Citi noted that longer-term execution in NSW Lotteries looks promising, however the broker argued that the absence of stimulus payments in CY10 and rising interest rates will place further pressure on earnings momentum, creating a headwind for outperformance.
Citi said spending trends in Victorian gaming are also weak in early 2H10. Going forward Citi said the market would continue to lag given the absence of stimulus payments.
TTS lags TAH in share in this market, and given regulatory delays in opening new venues and relocating machines, is unlikely to claw back share in the twilight years of the license.
Citi noted that longer-term execution in NSW Lotteries looks promising, however the broker argued that the absence of stimulus payments in CY10 and rising interest rates will place further pressure on earnings momentum, creating a headwind for outperformance.
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