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Don't Count Penn Gaming Out Yet

Penn National Gaming releases a sour outlook for 2010, but it's weakness could be a good buying opportunity.

(Penn article updated with stock price movement.)



) --

Penn National Gaming

(PENN) - Get Penn National Gaming, Inc. Report

narrowed its loss in the fourth quarter, but missed expectations and released a rather sour 2010 outlook.

Penn expects to earn $563 million, or $1 a share for the full-year, below Wall Street's forecast of $1.39 a share.

The disappointing outlook sent shares tanking 9.5% to $24.63 in morning trading.

Still, this doesn't mean you should discount the casino operator.

"We think Penn is providing intentionally conservative guidance in an effort to reverse two quarterly misses in a row, which have reflected regional gaming markets' soft spending patterns," J.P. Morgan analyst Joseph Greff wrote in a note,

Greff says he would buy the stock on the weakness. "Once today's 210 estimates are digested, Penn can ultimately be on the road to meet/beat in the future," he wrote. "Once that happens, we think its development pipeline will start to get valued by investors.

During the quarter, Penn recorded a loss of $355.4 million, or $4.54 a share, compared with a loss of $378.6 million, or $4.77, in the year-ago period.

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Analysts expected a profit of 18 cents a share.

Revenue slipped 2.6% to $555.8 million from $571.1 million last year.

Earlier in the week

Melco Crown Entertainment


announced that it widened its fourth-quarter loss, while

Ameristar Casinos


missed forecasts.

-- Reported by Jeanine Poggi in New York.

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