Bally Technologies rises after started at 'Buy'

Shares of Bally Technologies Inc. rose Wednesday after an analyst initiated coverage with a "Buy" rating, saying the casino equipment maker may take on additional market share and improve its margins.

Nicholas A. Danna IV of Sterne, Agee & Leach Equity Research said in a client note that increased usage of Bally's iView displays and power-bonusing technology should give an additional boost to its systems revenue. IView displays are interactive slot machine displays that can give players custom rewards and messaging driven by their overall play level.

While the company has seen better gross and operating margins, Danna said its gross margins on game sales are behind its rivals, leaving room for further expansion.

The analyst also expects the company to capitalize on international and domestic expansion efforts.

Danna provided a $55 price target.

Bally's stock gained $2.46, or 6.2 percent, to $42.26. The stock has traded in a range of $23.86 to $52.83 over the last 52 weeks.