Morgan Stanley Opens 60-Day Research Tactical Idea on International Game Technology
Morgan Stanley has opened a research tactical idea on International Game Technology (NYSE: IGT) believing that the share price will rise over the next 60 days.
In the report, Morgan Stanley writes, "We believe the recent pullback in shares is unwarranted. A sequence of events (DoubleDown deal, likely messy F2Q, and seasonally weak F1Q earnings) appear to have combined to shake investor confidence. While semi-understandable, we believe the R/R is favorable (4:1 Bull/Bear) skew. We highlight key drivers: 1) IGT's EPS should improve sequentially from the seasonally weak Dec Q driven by improving domestic new casino openings and int'l market share gains; 2) the return of capital story is likely to accelerate as IGT has completed online gaming related M&A activity, in our view. We estimate IGT can buy back ~25% of its current market cap through FY14 if it maintains 2x net-leverage; 3) downside should be limited to $13-14 as we value IGT's recurring game ops segment at $13 in our base case."
Morgan Stanley maintains its Overweight rating on International Game Technology, which closed Friday at $15.25.
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