Magna Entertainment downgraded to “hold”
Horse track owner and operator Magna Entertainment Corp. (Nasdaq: MECA) was cut to a “hold” rating from a “buy” rating by Brean Murray Carrett & Co. Monday.
Brean Murray Carrett & Co analyst Ryan Worst cut the company’s rating on the idea that that Magna’s change in CEO reduces confidence in the company’s ability to execute on existing assets.
Worst wrote in a research note, “…the risk that Friday’s CEO change arose from a disagreement over Magna’s strategic direction or execution outweighs other potential reasons for the departure and reduces our confidence in MECA shares.”
On Friday, Magna announced that then current CEO Michael Nueman was stepping down to pursue other opportunities. The Canadian company named Chairman Frank Stronach to be interim CEO.
“We are concerned that the execution of asset sales and the company’s strategy may differ under Mr. Stronach,” Worst wrote.
Worst forecasts earnings per share of $0.67 for fiscal year 2007 compared with earnings per share of $1.01 in 2006.
Shares of Magna Entertainment were up 2.1%, or $0.06, to $2.89 Monday morning.
