Robertson Stephens Daily Growth Stock Update on VRST, MIPS, CTRA, DCLK, ELNT, DNA, AFFX, BBSW, VTSS, WMT

Apr 16, 2001, 01:00 ET from Robertson Stephens, Inc.

    SAN FRANCISCO, April 16 /PRNewswire/ -- The following is being issued by
 Robertson Stephens, Inc.:
 
     Initiation of Coverage:
 
     Verisity Ltd.
     (Nasdaq:   VRST) $10.55
     Buy
     2000A EPS: ($0.28)
     2001E EPS: $0.12, New
 
     John Barr, Design Enabling Technologies
     "Verisity is riding the curve for growth in design complexity," said Barr.
     "Design verification consumes approximately 60% of development effort.
     Verisity is the leading supplier of software used to verify the
     functionality of systems and semiconductors, particularly for
     communications customers. Verisity has a significant market opportunity
     having sold approximately 5,000 licenses into a market of approximately
     160,000 simulation seats. Although we believe this is a challenging
     environment for all design automation companies, we believe Verisity is
     one of the best positioned to achieve its growth plans. The company's
     business model provides very strong visibility.  We estimate 30% of
     license revenue was from subscriptions in 2000, with growth to 60%
     estimated for 2001.  Verisity has reported deferred revenue of $20 million
     and we estimate total backlog including committed bookings beyond one-year
     of $25-30 million. At $10.55 per share, Verisity trades at approximately
     29x our 2002 EPS estimate and 3.9x market cap/ 2002 estimated revenue.
     Given the uncertainty of the macro environment, we believe Verisity could
     be valued from 30-40x our 2002 EPS estimate for a target price of
     approximately $13 per share at the midpoint of this P/E range. Thus, we
     are initiating coverage with a Buy rating."
 
     Rating Changes:
 
     MIPS Technologies, Inc.
     (Nasdaq:   MIPS) $22.23
     Downgrading to Long-Term Attractive from Buy
     F2001E EPS: $0.58, down from $0.61
     F2002E EPS: $0.39, down from $0.71
 
     John Barr, Design Enabling Technologies
     "MIPS reported revenue of $27.8 million and $0.21 EPS, above our $25.5
     million and $0.19 estimates," said Barr. "However, without the upside in
     Nintendo-64 royalties, revenue would have been  $23.3 million, with EPS of
     just $0.14. Christmas season Nintendo-64 royalties of $12.0 million far
     exceeded our $7.5 million estimate.  Non-Nintendo royalties of $4.1
     million grew 64% y/y, but were below our $4.3 million estimate.  Licensing
     revenue of $11.7 million showed 33% year-over year growth, but was below
     our $13.7 million estimate and flat sequentially for the third consecutive
     quarter.  We believe the difficult semiconductor environment makes it
     unlikely we will see sequential growth until C2002.  We have reduced our
     F4Q01 revenue estimate to $19.1 million and our EPS estimate to $0.09,
     below the previous estimates of $25.5 million and $0.19, based on a
     reduction of our non-Nintendo royalty and license revenue estimates. We
     have significantly reduced our F02 estimates to $79.7 million revenue and
     $0.39 EPS, below our previous $91.2 million revenue and $0.71 EPS. We are
     reducing our rating to Long Term Attractive from Buy.  In this uncertain
     semiconductor environment, we believe MIPS will not see significant growth
     or business momentum in the non-Nintendo business for at least two
     quarters.  We are establishing a 6-12 month price target of $25-26,
     providing limited upside from today's $22.23 price."
 
     Estimate Changes:
 
     Centra Software, Inc.
     (Nasdaq:   CTRA) $8.20
     Buy
     2001E EPS: ($0.32), up from ($0.37)
 
     Cindy Hope Hatstadt, Knowledge Technologies
     "This morning, Centra reported another solid quarter, raised its guidance
     and reiterated its profitability target of Q4:01 - an impressive position
     to be in given the current environment for technology companies," said
     Hatstadt. "Centra announced the acquisition of MindLever, a small but
     strategically important company in the content-management space. The deal
     is valued at roughly $6.5 million and is a stock-cash transaction. Final
     details have not yet been disclosed. While the company has raised its
     guidance slightly, we believe it is prudent to hold our estimates at
     current levels, in light of the uncertain economic environment. Further,
     we are cautious about the gross margin line given, what we believe to be,
     an unstable pricing environment for its ASP platform. We expect the stock
     to be plagued by near-term volatility but view Centra as an attractive
     stock to own for investors looking to participate in the rapidly growing
     market for eLearning and knowledge solutions. Demand for its products
     remains strong and we believe that its expanding product line lies at the
     heart of the point of pain for businesses today."
 
     Doubleclick Inc.
     (Nasdaq:   DCLK) $12.62
     Buy F2001E EPS: $(0.25), down from $0.00
 
     Lowell Singer, Next-Generation Internet enablers
     "DoubleClick reported in-line Q1 results," said Singer. "While the media
     portion of DoubleClick's business met our estimates, the company continues
     to see increased softness in the online advertising market. This slowdown
     has been compounded by a slowdown in overall advertising spending across
     all mediums, such as print and television.  Given the current state of
     both the online and offline advertising market, we believe online ad
     spending may not rebound in 2001, and that the company's media business
     could continue to struggle. We are lowering our revenue and EPS estimates
     to reflect both management's updated guidance and our lingering concerns
     over the health of the online ad market in 2001."
 
     Elantec Semiconductor, Inc.
     (Nasdaq:   ELNT) $33.91
     Long-Term Attractive
     F2001E EPS: $0.82, down from $1.05
     F2002E EPS: $0.78, down from $1.28
 
     Tore Svanberg, Analog & Mixed-Signal Semiconductor Devices
     Elantec reported Q2:F01 revenues of $30.6 million, down 25% sequentially,"
     said Svanberg. "Gross margin was 54.1% declining approximately 584bps from
     the previous quarter.  Expenses were $11.1 million, and as a result, EPS
     came in at $0.20, a penny below our estimate and inline with the Street
     consensus estimate. Revenue growth during the quarter was driven by sales
     in the company's video business up 11% sequentially and representing 34%
     of total revenue.  The company's other product lines declined with optical
     storage experiencing a 63% reduction due to high inventory levels at
     Japanese customers.  In addition, the company's communications business
     declined 7% as North American xDSL customers processed high inventory
     levels.  Elantec's power management business and 'other' business also
     experienced a slight decline of approximately 12%. The company introduced
     10 new products during the quarter including four new high-speed
     comparators, three optical storage laser drivers, and three communications
     line drivers.  The company has guided for a 20% sequential decline in the
     June quarter citing a slowdown in business, particularly in the
     communications segment where inventory adjustments are expected to
     persist.  Beyond the June quarter, the company's visibility is limited due
     to a combination of customer order patterns and uncertain macroeconomic
     conditions."
 
     Genentech, Inc.
     (NYSE:   DNA) $45.65
     Buy
     2002E EPS: $1.06, up from $0.97
 
     Jay Silverman, Biopharmaceuticals
     "Genentech reported a strong first quarter with an EPS of $0.17, in line
     with our forecast and Street consensus," said Silverman. "Product sales
     for the quarter soared to $392 million, cleanly beating our estimate of
     $352 million. Sales growth was driven by impressive Rituxan sales of $172
     million and Herceptin sales of $81 million, both of which easily beat our
     estimates. We are significantly raising our sales estimates for Rituxan
     and Herceptin for 2001 and beyond. We are also raising our expense
     estimates to come more in line with company guidance. As a result of these
     changes, we are maintaining our 2001 EPS estimate of $0.76 and lowering
     our 2002 EPS estimate to $0.97 to come more in line with consensus and
     guidance. Genentech is submitting additional safety data to the FDA for
     asthma/allergy drug Xolair. Since we now expect launch to occur in 4Q:01,
     we are moving estimates back by one quarter. We reiterate our belief that
     any delay in the FDA review process does not have implications on the
     long-term prospects of this blockbuster drug.  In our opinion, this
     quarter was very positive for Genentech and should put to rest certain
     investor concerns, specifically about Herceptin growth. With five
     compounds in Phase III or later development and many more progressing
     through early clinical development, Genentech continues to demonstrate
     leadership in the industry. We reiterate our Buy rating."
 
     Comments:
 
     Affymetrix, Inc.
     (Nasdaq:   AFFX) $32.15
     Strong Buy
 
     Michael King, Biopharmaceuticals
     "The Bay Area Genomics Tour concluded Thursday with visits to Molecular
     Devices, Affymetrix and Ciphergen," said King. "In our view, the highlight
     of the day was the few hours spent with AFFX management. Investors left
     the company feeling optimistic about the company's enhanced legal status,
     scalable manufacturing process, relative competitive position and logical/
     low-risk stake in Perlegen. The recent OGT settlement and thorough
     presentation by management left investors feeling that there is minimal
     near-term litigation risk. Further, there is the potential for decreased
     legal expanses going forward despite ongoing suits with Incyte, Hyseq and
     Applied Biosystems. Despite focusing on correcting the Murine array
     defects this quarter, we remain comfortable with our top-line forecast of
     $60.5 million and EPS estimate of ($0.10) excl. amortization. We believe
     Q1:01 murine array charge will be on the order of $1 million vs. the $2
     million we projected. We reiterate our Strong Buy rating."
 
     Broadbase Software, Inc.
     (Nasdaq:   BBSW) $1.08
     Long-Term Attractive
 
     Eric Upin, Business-to-Business eCommerce
     "Broadbase reported Q1:01 results largely in line with pre-announced
     numbers," said Upin. "We will not be changing our Q2:01 estimates until
     the company provides further guidance on the Kana earnings call scheduled
     for later this month.  On April 9, Broadbase announced that it had entered
     into a definitive agreement to be acquired by Kana, a leading provider of
     eCRM support products, in a stock-for-stock purchase transaction valued at
     roughly $75MM.  We believe this is positive for Broadbase shareholders,
     given that the combined entity strengthens the company's financial
     position, broadens its product footprint, expands its customer base."
 
     Vitesse Semiconductor Corporation
     (Nasdaq:   VTSS) $25.70
     Long-Term Attractive
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Vitesse is expected to report results after the market close today," said
     Veerappan. "Our estimate of $120 million in revenue and $0.11 in EPS, is
     in-line with the company's pre-announcement. We expect the company to
     execute to this set of estimates, given that its pre-announcement was
     given late in the quarter. The focus, however, will be on the outlook that
     the company is able to provide into the June quarter. We are currently
     modeling that the company will see its revenues decline 10% Q-Q to $108
     million. Should business conditions not have improved significantly thus
     far into April, a 20% Q-Q decline in revenues and a corresponding decline
     in EPS will not be out of line, however. We believe that business has not
     improved substantially since the company pre-announced and believe, in
     fact, that order activity has continued to remain poor through the last
     weeks of March for the base business. Overall, our thesis is that near-
     term business remains soft, but that Vitesse is making the right strategic
     moves for the long term."
 
     Wal-Mart Stores, Inc.
     (NYSE:   WMT) $50.84
     Buy
 
     Bill Dreher, Broadline Retailing: Discount & Department Stores
     "Wal-Mart's Total Company comparable sales increased 3.5% in March," said
     Dreher. "As has been the trend, this was led with a 4.1% comp at the clubs
     and a 3.3% at the Wal-Mart division.  Our forecast for the March reporting
     period was for a total company comparable sales increase at the low end of
     the 3-5% range, and both the Wal-Mart and Sam's divisions finished within
     that range. We reiterate our 12-month price of $59 which holds the
     potential for 20% upside from the current level of $49.70."
 
     Industry Updates:
 
     Gaming Update
 
     Harry Curtis, Gaming & Lodging
     "Our favorite names in the gaming space remain Harrah's and IGT," said
     Curtis. "Our 1Q:01 EPS estimates remain slightly above consensus and we
     anticipate both companies will report strong quarterly results with robust
     fundamentals."
 
     Lodging Industry
 
     Harry Curtis, Gaming & Lodging
     "We expect most companies under our coverage to meet consensus estimates
     for 1Q:01, but issue cautious guidance on their 1Q:01 conference calls,"
     said Curtis. "A slowing economy, significantly reduced business travel and
     corporate cutbacks are likely to result in downward guidance from most
     lodging companies for the remainder of 2001. We estimate full year 2001
     RevPAR growth will be 2-3%, a deceleration from industry growth of 5.5% in
     2001 and below our original expectations of 4% for the year. On a positive
     note, 2-3% RevPAR growth and a 150 basis point interest rate cut should
     translate to low teens EPS growth for most companies under coverage."
 
     Unless otherwise noted, prices are as of Thursday, April 12, 2001.
 
     Robertson Stephens maintains a market in the shares of Verisity, MIPS,
 Centra Software, DoubleClick, Elantec Semiconductor, Affymetrix, Broadbase
 Software, and Vitesse Semiconductor and has been a managing or comanaging
 underwriter for or has privately placed securities of Verisity, MIPS, Centra
 Software, Elantec Semiconductor, Genentech, and Affymetrix within the past
 three years.
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 Stephens") is the leading full-service investment bank focused exclusively on
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 not necessarily updated on a regular basis; when it is, the date of the change
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     Copyright (C) 2001 Robertson Stephens
 
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 Dealers, CRD number 41271.
 
 

SOURCE Robertson Stephens, Inc.
    SAN FRANCISCO, April 16 /PRNewswire/ -- The following is being issued by
 Robertson Stephens, Inc.:
 
     Initiation of Coverage:
 
     Verisity Ltd.
     (Nasdaq:   VRST) $10.55
     Buy
     2000A EPS: ($0.28)
     2001E EPS: $0.12, New
 
     John Barr, Design Enabling Technologies
     "Verisity is riding the curve for growth in design complexity," said Barr.
     "Design verification consumes approximately 60% of development effort.
     Verisity is the leading supplier of software used to verify the
     functionality of systems and semiconductors, particularly for
     communications customers. Verisity has a significant market opportunity
     having sold approximately 5,000 licenses into a market of approximately
     160,000 simulation seats. Although we believe this is a challenging
     environment for all design automation companies, we believe Verisity is
     one of the best positioned to achieve its growth plans. The company's
     business model provides very strong visibility.  We estimate 30% of
     license revenue was from subscriptions in 2000, with growth to 60%
     estimated for 2001.  Verisity has reported deferred revenue of $20 million
     and we estimate total backlog including committed bookings beyond one-year
     of $25-30 million. At $10.55 per share, Verisity trades at approximately
     29x our 2002 EPS estimate and 3.9x market cap/ 2002 estimated revenue.
     Given the uncertainty of the macro environment, we believe Verisity could
     be valued from 30-40x our 2002 EPS estimate for a target price of
     approximately $13 per share at the midpoint of this P/E range. Thus, we
     are initiating coverage with a Buy rating."
 
     Rating Changes:
 
     MIPS Technologies, Inc.
     (Nasdaq:   MIPS) $22.23
     Downgrading to Long-Term Attractive from Buy
     F2001E EPS: $0.58, down from $0.61
     F2002E EPS: $0.39, down from $0.71
 
     John Barr, Design Enabling Technologies
     "MIPS reported revenue of $27.8 million and $0.21 EPS, above our $25.5
     million and $0.19 estimates," said Barr. "However, without the upside in
     Nintendo-64 royalties, revenue would have been  $23.3 million, with EPS of
     just $0.14. Christmas season Nintendo-64 royalties of $12.0 million far
     exceeded our $7.5 million estimate.  Non-Nintendo royalties of $4.1
     million grew 64% y/y, but were below our $4.3 million estimate.  Licensing
     revenue of $11.7 million showed 33% year-over year growth, but was below
     our $13.7 million estimate and flat sequentially for the third consecutive
     quarter.  We believe the difficult semiconductor environment makes it
     unlikely we will see sequential growth until C2002.  We have reduced our
     F4Q01 revenue estimate to $19.1 million and our EPS estimate to $0.09,
     below the previous estimates of $25.5 million and $0.19, based on a
     reduction of our non-Nintendo royalty and license revenue estimates. We
     have significantly reduced our F02 estimates to $79.7 million revenue and
     $0.39 EPS, below our previous $91.2 million revenue and $0.71 EPS. We are
     reducing our rating to Long Term Attractive from Buy.  In this uncertain
     semiconductor environment, we believe MIPS will not see significant growth
     or business momentum in the non-Nintendo business for at least two
     quarters.  We are establishing a 6-12 month price target of $25-26,
     providing limited upside from today's $22.23 price."
 
     Estimate Changes:
 
     Centra Software, Inc.
     (Nasdaq:   CTRA) $8.20
     Buy
     2001E EPS: ($0.32), up from ($0.37)
 
     Cindy Hope Hatstadt, Knowledge Technologies
     "This morning, Centra reported another solid quarter, raised its guidance
     and reiterated its profitability target of Q4:01 - an impressive position
     to be in given the current environment for technology companies," said
     Hatstadt. "Centra announced the acquisition of MindLever, a small but
     strategically important company in the content-management space. The deal
     is valued at roughly $6.5 million and is a stock-cash transaction. Final
     details have not yet been disclosed. While the company has raised its
     guidance slightly, we believe it is prudent to hold our estimates at
     current levels, in light of the uncertain economic environment. Further,
     we are cautious about the gross margin line given, what we believe to be,
     an unstable pricing environment for its ASP platform. We expect the stock
     to be plagued by near-term volatility but view Centra as an attractive
     stock to own for investors looking to participate in the rapidly growing
     market for eLearning and knowledge solutions. Demand for its products
     remains strong and we believe that its expanding product line lies at the
     heart of the point of pain for businesses today."
 
     Doubleclick Inc.
     (Nasdaq:   DCLK) $12.62
     Buy F2001E EPS: $(0.25), down from $0.00
 
     Lowell Singer, Next-Generation Internet enablers
     "DoubleClick reported in-line Q1 results," said Singer. "While the media
     portion of DoubleClick's business met our estimates, the company continues
     to see increased softness in the online advertising market. This slowdown
     has been compounded by a slowdown in overall advertising spending across
     all mediums, such as print and television.  Given the current state of
     both the online and offline advertising market, we believe online ad
     spending may not rebound in 2001, and that the company's media business
     could continue to struggle. We are lowering our revenue and EPS estimates
     to reflect both management's updated guidance and our lingering concerns
     over the health of the online ad market in 2001."
 
     Elantec Semiconductor, Inc.
     (Nasdaq:   ELNT) $33.91
     Long-Term Attractive
     F2001E EPS: $0.82, down from $1.05
     F2002E EPS: $0.78, down from $1.28
 
     Tore Svanberg, Analog & Mixed-Signal Semiconductor Devices
     Elantec reported Q2:F01 revenues of $30.6 million, down 25% sequentially,"
     said Svanberg. "Gross margin was 54.1% declining approximately 584bps from
     the previous quarter.  Expenses were $11.1 million, and as a result, EPS
     came in at $0.20, a penny below our estimate and inline with the Street
     consensus estimate. Revenue growth during the quarter was driven by sales
     in the company's video business up 11% sequentially and representing 34%
     of total revenue.  The company's other product lines declined with optical
     storage experiencing a 63% reduction due to high inventory levels at
     Japanese customers.  In addition, the company's communications business
     declined 7% as North American xDSL customers processed high inventory
     levels.  Elantec's power management business and 'other' business also
     experienced a slight decline of approximately 12%. The company introduced
     10 new products during the quarter including four new high-speed
     comparators, three optical storage laser drivers, and three communications
     line drivers.  The company has guided for a 20% sequential decline in the
     June quarter citing a slowdown in business, particularly in the
     communications segment where inventory adjustments are expected to
     persist.  Beyond the June quarter, the company's visibility is limited due
     to a combination of customer order patterns and uncertain macroeconomic
     conditions."
 
     Genentech, Inc.
     (NYSE:   DNA) $45.65
     Buy
     2002E EPS: $1.06, up from $0.97
 
     Jay Silverman, Biopharmaceuticals
     "Genentech reported a strong first quarter with an EPS of $0.17, in line
     with our forecast and Street consensus," said Silverman. "Product sales
     for the quarter soared to $392 million, cleanly beating our estimate of
     $352 million. Sales growth was driven by impressive Rituxan sales of $172
     million and Herceptin sales of $81 million, both of which easily beat our
     estimates. We are significantly raising our sales estimates for Rituxan
     and Herceptin for 2001 and beyond. We are also raising our expense
     estimates to come more in line with company guidance. As a result of these
     changes, we are maintaining our 2001 EPS estimate of $0.76 and lowering
     our 2002 EPS estimate to $0.97 to come more in line with consensus and
     guidance. Genentech is submitting additional safety data to the FDA for
     asthma/allergy drug Xolair. Since we now expect launch to occur in 4Q:01,
     we are moving estimates back by one quarter. We reiterate our belief that
     any delay in the FDA review process does not have implications on the
     long-term prospects of this blockbuster drug.  In our opinion, this
     quarter was very positive for Genentech and should put to rest certain
     investor concerns, specifically about Herceptin growth. With five
     compounds in Phase III or later development and many more progressing
     through early clinical development, Genentech continues to demonstrate
     leadership in the industry. We reiterate our Buy rating."
 
     Comments:
 
     Affymetrix, Inc.
     (Nasdaq:   AFFX) $32.15
     Strong Buy
 
     Michael King, Biopharmaceuticals
     "The Bay Area Genomics Tour concluded Thursday with visits to Molecular
     Devices, Affymetrix and Ciphergen," said King. "In our view, the highlight
     of the day was the few hours spent with AFFX management. Investors left
     the company feeling optimistic about the company's enhanced legal status,
     scalable manufacturing process, relative competitive position and logical/
     low-risk stake in Perlegen. The recent OGT settlement and thorough
     presentation by management left investors feeling that there is minimal
     near-term litigation risk. Further, there is the potential for decreased
     legal expanses going forward despite ongoing suits with Incyte, Hyseq and
     Applied Biosystems. Despite focusing on correcting the Murine array
     defects this quarter, we remain comfortable with our top-line forecast of
     $60.5 million and EPS estimate of ($0.10) excl. amortization. We believe
     Q1:01 murine array charge will be on the order of $1 million vs. the $2
     million we projected. We reiterate our Strong Buy rating."
 
     Broadbase Software, Inc.
     (Nasdaq:   BBSW) $1.08
     Long-Term Attractive
 
     Eric Upin, Business-to-Business eCommerce
     "Broadbase reported Q1:01 results largely in line with pre-announced
     numbers," said Upin. "We will not be changing our Q2:01 estimates until
     the company provides further guidance on the Kana earnings call scheduled
     for later this month.  On April 9, Broadbase announced that it had entered
     into a definitive agreement to be acquired by Kana, a leading provider of
     eCRM support products, in a stock-for-stock purchase transaction valued at
     roughly $75MM.  We believe this is positive for Broadbase shareholders,
     given that the combined entity strengthens the company's financial
     position, broadens its product footprint, expands its customer base."
 
     Vitesse Semiconductor Corporation
     (Nasdaq:   VTSS) $25.70
     Long-Term Attractive
 
     Arun Veerappan, Communications Components/Semiconductor Devices
     "Vitesse is expected to report results after the market close today," said
     Veerappan. "Our estimate of $120 million in revenue and $0.11 in EPS, is
     in-line with the company's pre-announcement. We expect the company to
     execute to this set of estimates, given that its pre-announcement was
     given late in the quarter. The focus, however, will be on the outlook that
     the company is able to provide into the June quarter. We are currently
     modeling that the company will see its revenues decline 10% Q-Q to $108
     million. Should business conditions not have improved significantly thus
     far into April, a 20% Q-Q decline in revenues and a corresponding decline
     in EPS will not be out of line, however. We believe that business has not
     improved substantially since the company pre-announced and believe, in
     fact, that order activity has continued to remain poor through the last
     weeks of March for the base business. Overall, our thesis is that near-
     term business remains soft, but that Vitesse is making the right strategic
     moves for the long term."
 
     Wal-Mart Stores, Inc.
     (NYSE:   WMT) $50.84
     Buy
 
     Bill Dreher, Broadline Retailing: Discount & Department Stores
     "Wal-Mart's Total Company comparable sales increased 3.5% in March," said
     Dreher. "As has been the trend, this was led with a 4.1% comp at the clubs
     and a 3.3% at the Wal-Mart division.  Our forecast for the March reporting
     period was for a total company comparable sales increase at the low end of
     the 3-5% range, and both the Wal-Mart and Sam's divisions finished within
     that range. We reiterate our 12-month price of $59 which holds the
     potential for 20% upside from the current level of $49.70."
 
     Industry Updates:
 
     Gaming Update
 
     Harry Curtis, Gaming & Lodging
     "Our favorite names in the gaming space remain Harrah's and IGT," said
     Curtis. "Our 1Q:01 EPS estimates remain slightly above consensus and we
     anticipate both companies will report strong quarterly results with robust
     fundamentals."
 
     Lodging Industry
 
     Harry Curtis, Gaming & Lodging
     "We expect most companies under our coverage to meet consensus estimates
     for 1Q:01, but issue cautious guidance on their 1Q:01 conference calls,"
     said Curtis. "A slowing economy, significantly reduced business travel and
     corporate cutbacks are likely to result in downward guidance from most
     lodging companies for the remainder of 2001. We estimate full year 2001
     RevPAR growth will be 2-3%, a deceleration from industry growth of 5.5% in
     2001 and below our original expectations of 4% for the year. On a positive
     note, 2-3% RevPAR growth and a 150 basis point interest rate cut should
     translate to low teens EPS growth for most companies under coverage."
 
     Unless otherwise noted, prices are as of Thursday, April 12, 2001.
 
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