Potential softness in the Louisiana gambling market could hurt Pinnacle Entertainment, an analyst said today as he downgraded the casino operator. Steven Kent of Goldman Sachs reduced his rating to “neutral” from “buy,” saying Louisiana might be weighed down by declining energy prices. “The region seemed to benefit in 2008 from a strong Louisiana/Texas economy, but with oil moving lower and layoffs starting, Pinnacle could facing challenging comparisons,” the analyst wrote in a client note. Pinnacle operates L’Auberge du Lac casino resort in Lake Charles, and Boomtown casinos in Harvey and Bossier City. The company is developing a resort on River Road and Sugarcane Bay in Lake Charles. The casino sector has come under pressure as consumers curb their discretionary spending due to the continued housing downturn, increased food costs, diminishing credit and unemployment concerns.
Pinnacle downgraded on possible Louisiana weakness
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