Pinnacle Folds Louisiana Casino

Pinnacle Entertainment says it is canceling plans to develop its Sugarcane Bay project.
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NEW YORK (

TheStreet

) --

Pinnacle Entertainment

(PNK) - Get Report

announced Friday that it is folding plans to build a 305 million riverboat casino and hotel in Louisiana.

Instead, Pinnacle will focus on its development in Baton Rouge, which will include 1,300 slot machines, 50 table games and at least 100 hotel rooms.

Pinnacle's Sugarcane Bay project was to be located by the company's L'Auberge du Lac Casino Resort.

"This is new CEO Anthony Sanfilippo's first major (at least public) decision, and one that, in our opinion, shows strong and rational capital allocation decision-making," J.P. Morgan analyst Joseph Greff wrote in a note.

Sanfilippo was named president and CEO on March 15.

Greff says investors should be happy with the news, and the stock should see a lift this morning. "In addition, we believe that the margin improvement opportunity is meaningful at L' Auberge du Lac and could drive solid upside to consensus over time," he wrote.

-- Reported by Jeanine Poggi in New York.

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