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Isle of Capri Downgraded by Wall Street Analyst
ST. LOUIS --
Casino and Gaming industry analyst Ryan Worst downgraded Isle of Capri Casinos Inc. (NASDAQ: ISLE) from a "Buy" to a "Hold" on Monday causing the stock to move lower on higher than normal volume. The share price fell to its lowest figure since the 2001-2002 timeframe.
Reasons for the downgrade by analyst Worst include continuing economic concerns, tightened consumer spending, plus a possible smoking ban in Iowa. He believes income growth will be harder to achieve in the next few quarters, likely keeping the stock price depressed.
Recently, many gaming companies are seeing a downturn in their businesss. Boyd Gaming last week announced a 45% decrease in 4th quarter net income. Analysts place the blame on reduced consumer spending caused by high fuel prices, a continued housing market recession, and overall economic concerns including a weak dollar.
One of the biggest areas of concern for Isle of Capri may be a possible smoking ban in Iowa. Apparently, Iowa's House of Representatives passed a smoking ban in which casinos would be exempt, but the state's Senate removed the exemption before passage. Isle has casinos in Bettendorf, Waterloo, and Davenport Iowa.
Shares of the company fell 3.5% today, bringing the stock price down to under $9 per share. Shares in the Casino and Gaming sector are down 6% YTD. Over the past 5 years, the sector has outperformed the S & P 500 index by more than 40%.
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