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International Game Technology Scores Big With Argus' Buy Rating

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International Game Technology Scores Big With Argus' Buy Rating

Argus expects International Game Technology Ordinary Shares (NYSE: IGT) to gain from GTECH merger synergies and solid cash flow. Analyst John Staszak sees strong prospects for both solid revenue and earnings growth in the upcoming period.

Before the merger, the brokerage had a Hold rating on International Game Technology shares (February 2015). Staszak's newest analysis concluded with a Buy rating initiation and a price target of $30, implying upside potentials of about 25 percent from the current levels.

In the last four quarters, the company's EPS failed to meet estimates only once. Currently, Street analysts are looking for revenue growth of 8.5 percent, although EPS predictions indicated about 6.4 percent drop from last year.

Related Link: Argus Upgrades Las Vegas Sands; Macau Gaming Revenue Up For First Time In 2 Years

Argus expects EPS of $2.10 on $5.1 billion in revenue for the current year and $2.30 on $5.2 billion in revenue for next year. Its long-term EPS growth outlook remains at 7 percent. Staszak pointed out that the stock is trading 10.1X his 2017 EPS estimate, which is below the average forward multiple of 12.0 and the 26.0 average for gaming companies.

In a research note to clients, the brokerage said, "We also expect IGT to benefit from greater diversification following the merger and from more moderate currency headwinds. Our long-term rating is also BUY, as we expect international expansion and new gaming markets in the U.S. to drive sales higher over time."

Argus pointed out that International Game Technology offered about 3.5 percent dividend yield with expectation to boost dividend payout in the next several years.

The stock closed Thursday's regular trading at $23.80, having gained $0.28, or 1.19 percent, on the day. At time of writing Friday, the stock was up 1.09 percent at $24.06.

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Latest Ratings for IGT

DateFirmActionFromTo
Mar 2019AssumesNeutral
Dec 2018Initiates Coverage OnPositive
Nov 2018MaintainsBuyBuy

View More Analyst Ratings for IGT
View the Latest Analyst Ratings

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