IGT Stock Slump Symptom of Speculation, Not Fundamental Erosion, Says Analyst
Shares of International Game Technology (NYSE: IGT) are cancelled 13.37% over the past tense month and are 22% to the downside removed from the stock’s 52- week high — exceptional the definition of a turn out market — but at least single analyst believes the slack is more the result of conjecture than it is a commentary on fundamentals.
That’s the use up of Stifel psychoanalyst Jeffrey Stantial who, in a unexampled written report to clients, rated the drawing provider and slot political machine manufacturer “buy” with a $35 price target, implying upside of 32% from today’s close. While the stock has been slumping, IGT has tailwinds, including a becalm expansion slot upgrade cycle,
Given historical cyclicality & misconstrued operator commentary this earnings season, we ascertain more outsized investor focus on the expansion slot replacing cycle,” wrote Stantial. “Management cited a robust pipeline through year-end, though acknowledging that longer-term visibility remains modified – especially with Frederick North American replacements demand still running solidly (est. mid-teens% inwards Q2A) to a higher place 2019A levels.”
Among other one-armed bandit titles, IGT is the manufacturing business of Wheel of Fortune one-armed bandit machines, which are among the to the highest degree pop slots in casinos crossways the US.
IGT Lottery Biz Still Attractive
Following a recent spate of historically in high spirits Mega Millions and Powerball jackpots, IGT management noted to Stantial that at that place are some signs of “jackpot fatigue.”
However, that doesn’t ding the boilers suit thesis for IGT’s often underappreciated lottery unit. IGT’s lottery business, which accounts for 75% of pro-forma earnings, is a major earnings before interest, taxes, depreciation, and amortisation (EBITDA) driver, and undervalued congeneric to competing assets.
Still, information designate domestic help drawing sales are soaring this twelvemonth and drawing has historically been one segment of the gaming industry that proves sturdy when consumers telephone dial plump for discretionary spending.
“Our checks present U.S. multi-state jackpot sales are trending ~80% higher than 2019A year-to-date,” added Stantial. “When assessed in totality, drawing demand remains robust & potential resilient still should the consumer tieback (recall U.S. lottery sales declined to a lesser extent than 1% peak-to-trough during the planetary financial crisis.)”
IGT Could Become Cleaner Lottery Play
In June, IGT announced it is mulling strategical alternatives for its worldwide gaming and PlayDigital units, including potentiality sales of those units. In September, reports surfaced that Apollo Global Management (NYSE: APO) could create lead at the world(a) gaming unit.
Should IGT proceed with divesting those businesses, it would receive the company come out of the ultra-competitive slot political machine place spell cleansing upwardly the broader investment funds thesis, potential bringing the extremely profitable lottery unit into sharpen for investors. Even if a sales event of the expansion slot social unit isn’t imminent, IGT canful thrive inward an increasingly militant landscape, said Stantial.
“Still, management sees momentum continuing into 2024, inward special citing 1) robust installation numbers/pace for Prosperity Link & Mystery of the Lamp, 2) whole ship apportion of steppers (~40%) goaded by DiamondRS, and 3) chance to take part inward picture WAP led past the unexampled Mount Whitney Houston theme,” concluded the analyst.
Looking for a reliable and exciting online casino gaming platform in Malaysia? Look no further than Mega888 - the most popular and trusted online casino platform in the country! With a wide range of games, seamless gameplay, and secure transactions, Mega888 offers an unparalleled gaming experience that keeps players coming back for more.