JP Morgan Cuts Estimates and PT On Coinstar

JP Morgan has published a research report on Coinstar, Inc. (NASDAQ: CSTR) and is cutting estimates based on the company's negative pre-announcement.

In the report, JP Morgan writes "Coinstar issued a 4Q10 negative preannouncement citing execution challenges that seemed transient in nature and largely fixable. However 2011 guidance was also reduced by 12% at the midpoint, suggesting a more permanent challenge ahead that was not obvious from the press release alone. We are cutting estimates to align with the new guidance, and we are cutting the valuation multiple by one turn to reflect the risks highlighted by this quarter. We remain on alert for signs that digital downloading is impacting the kiosk rental market, but we don't yet have the evidence for this thesis."

JP Morgan maintains its Neutral rating and has lowered the price target from $56 to $42.

Coinstar, Inc. closed yesterday at $56.95.