UPDATE: Nomura Raises PT to $15 on International Gaming Technology on Share Repurchase Outlook
Nomura reiterated its Neutral rating on International Gaming Technology (NYSE: IGT) but raised its price target from $14 to $15.
Nomura commented, “Game Ops is expected to be relatively flat, which we view as positive given the no. of quality products that are competing for IGT‟s participation floor share. IGT broke out its interactive revs and gross margin for the first time. At first blush, those results look impressive, but we est. the segment was a flat to minor drag on FY2012 EPS given the significant fixed costs associated. We est. FY2014 recurring net income is flat with FY2012‟s ~$300M, as product sales normalize after FY2013‟s VLT bulge. We expect IGT to generate ~ 350-400M of free cash flow (implies a 10% FCF yield), which we expect will be primarily used for share repo."
International Gaming Technology closed at $12.83 on Thursday.
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