UPDATE: Deutsche Bank Downgrades International Game Technology to Hold, Reiterates $22 PT on Fair Valuation, Continuing Headwinds

In a report published Friday, Deutsche Bank analyst Carlo Santarelli downgraded the rating on International Game Technology IGT from Buy to Hold, but reiterated the $22.00 price target. In the report, Deutsche Bank noted, “Post an extended run in shares on relatively in line core fundamentals and transaction activity in the space, we are downgrading IGT to Hold from Buy and leaving our $22 PT (~8% upside from current levels) unchanged. At present, we believe expectations for increasing capital returns to shareholders are priced in, but note that industry fundamentals, namely in the gaming ops segment, are likely to become more challenged, thereby curtailing the free option in the stock for a turn in yields. At this stage, we see a largely balanced risk-reward, but believe industry challenges will curtail the multiple expansion story and we struggle to see F14 EPS estimates going higher from here.” International Game Technology closed on Thursday at $20.67.