Market Overview

Fewer Casino Openings, Weaker Powerball Sales Make International Game Tech A Riskier Bet This Year

Share:
Fewer Casino Openings, Weaker Powerball Sales Make International Game Tech A Riskier Bet This Year

International Game Technology Ordinary Shares (NYSE: IGT) may no longer be worth the gamble for investors.

Argus analyst John Staszak has downgraded the stock to Hold due to a number of near-term headwinds the firm has identified in the gaming equipment market.

The company’s recent 2017 EBITDA guidance of $1.68 billion–$1.76 billion is confirmation that International Game Technology has a tough road ahead this year, Staszak said in a note.

“IGT shares appear fairly valued at current prices near $23, near the midpoint of their 52-week range of $12–$32,” Staszak said. “Given the company’s current challenges, we see limited upside for the stock over the next 12 months.”

Analyst: MGM A Better Choice

Staszak said there will be relatively few new casino openings in the U.S. market this year, muting demand for gaming equipment. IGT also faces tough Powerball comps — and must make a $195 million payment to the Italian government as part of its deal to operate the country’s national lottery. That payment, Staszak said, is likely to weigh on the company’s free cash flow.

Argus maintains a favorable long-term view of International Game Technology’s cash flow, the analyst said, but the stock simply has no bullish catalysts ahead at the moment.

In the meantime, Argus recommends gaming investors opt for Buy-rated MGM Resorts International (NYSE: MGM).

Related Link:

Macau Might Finally Be Headed In The Right Direction

Don't Wait For Wynn To Pull Back; Aegis Capital Says Go Ahead And Buy Now

Latest Ratings for IGT

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

View More Analyst Ratings for IGT
View the Latest Analyst Ratings

Posted-In: Argus casinosAnalyst Color Downgrades Topics Travel Analyst Ratings General Best of Benzinga

 

Related Articles (IGT + MGM)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NVDACascendMaintains220.0
ADBECleveland ResearchInitiates Coverage On283.0
IMOCiBCUpgrades
RETAJefferiesMaintains254.0
SNAPAreteUpgrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Mid-Afternoon Market Update: Dow Falls 50 Points; Micron Shares Jump Following Strong Earnings Report

Julian Assange's 'Sonic Screwdriver': Latest WikiLeaks Disclosure Says CIA Injected Spy Software Into Mac Chips