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Analyst Downgrades Tropicana Operator

27 July 2000

Robertson Stephens gaming analyst Harry Curtis downgraded his rating on Phoenix-based Aztar Corp., saying its shares "are fairly valued at current levels."

Curtis cut the Tropicana operator's rating from "buy" to "long-term attractive." Curtis had set a $16 price target for the stock, a price level the company reached in April after a 166 percent increase since April 1999.

"Shares of Aztar trade at 6.8 times our estimated 2000 (cash flow) of approximately $163 million and 6.5 times our 2001 (cash flow) estimate of $165 million," Curtis wrote. "In our view, significant multiple expansion beyond these levels is unlikely."

Curtis downplayed the likelihood of a takeover of Aztar, saying that MGM MIRAGE has not shown interest in acquiring riverboat companies, while Harrah's Entertainment is unlikely to want to increase its exposure in Atlantic City or Laughlin.

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