{"id":216420,"date":"2022-06-08T12:29:31","date_gmt":"2022-06-08T19:29:31","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=216420"},"modified":"2022-06-08T13:15:38","modified_gmt":"2022-06-08T20:15:38","slug":"igt-lottery-unit-deserves-more-attention-from-investors","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/","title":{"rendered":"IGT Lottery Business Deserves More Credit, Says Analyst"},"content":{"rendered":"

International Game Technology (NYSE:IGT) is the maker of the famous Wheel of Fortune<\/em> slot machine, and has budding exposure to iGaming, among other pursuits. But an analyst argues investors shouldn\u2019t lose sight of the company\u2019s thriving lottery business.<\/p>\n

\"IGT\"
A bank of IGT’s Wheel of Fortune slot machines. An analyst says IGT’s lottery business deserves more credit. (Image: Las Vegas Weekly<\/em>)<\/figcaption><\/figure>\n

In a report to clients, Stifel analyst Jeffrey Stantial highlights IGT\u2019s lottery unit<\/a>, noting that business could prove durable even if the economy slumps. He points out that lottery accounts for 75% of IGT\u2019s pro forma earnings, but commands just 25% of the focus the investment community pays to the gaming company.<\/p>\n

Our constructive view on the shares remains anchored by a valuation dislocation for IGT’s cash generative, recession resilient, and fundamentally accelerating lottery business with disproportionate focus paid to IGT’s smaller iGaming business,\u201d<\/strong> writes the analyst.<\/p><\/blockquote>\n

Stantial reiterates a \u201cbuy\u201d rating on IGT with a $36 price target, implying upside of 63.6% from June 7 close. The shares are down 23.66% year-to-date.<\/p>\n

IGT Lottery Fighting Conglomerate Discount Blues<\/h2>\n

Part of the reason IGT\u2019s lottery arm may not be getting the credit it deserves is that the company has other operations, making it a gaming conglomerate<\/a> of sorts.<\/p>\n

The thesis that IGT stock is receiving a conglomerate discount isn\u2019t unreasonable. Lottery assets are cash generators and desirable in the investment community, but often don\u2019t get full credit when the parent company has other lines of business.<\/p>\n

\n

Stifel\u2019s Stantial calls the valuation gap between IGT and publicly traded Australian and European peers \u201coverly punitive,\u201d but acknowledges it\u2019s closing.<\/p>\n<\/div>\n

Still, there\u2019s no getting around the fact that in the gaming industry, lottery is one of the most recession-resistant offerings, and that\u2019s something to consider as analysts and executives express concern about the impact of runaway inflation<\/a> on consumer spending.<\/p>\n

\u201cTo the extent the consumer does begin to fade, management highlighted the highly recession resilient nature of lottery demand (largely driven by substitution effect & player psychology) with lottery sales contracting just -0.4% peak-to-trough during 2008\/09,\u201d said Stantial of IGT.<\/p>\n

Lottery Tailwinds for IGT<\/h2>\n

Whether it\u2019s iGaming, online sports betting or, to a lesser extent, iLottery, investors are increasingly captivated by and scrutinizing of the gaming industry\u2019s still nascent online endeavors. However, traditional lottery can provide catalysts for IGT.<\/p>\n

\u201cWhile investor focus remains on the higher growth secular opportunities (iLottery, iGaming, cashless, etc.), an ongoing acceleration in traditional lottery sales will have a much more pronounced impact on near-term earnings growth,\u201d <\/strong>notes Stantial.<\/p>\n

The analyst adds that if IGT\u2019s same-store sales increase just 1%, that\u2019s a $10 million boost to net revenue.\u00a0 That\u2019s a more efficient, cost-effective sales increase than many online operators currently generate.<\/p>\n","protected":false},"excerpt":{"rendered":"

International Game Technology (NYSE:IGT) is the maker of the famous Wheel of Fortune slot machine, and has budding exposure to iGaming, among other pursuits. But an analyst argues investors shouldn\u2019t lose sight of the company\u2019s thriving lottery business. In a report to clients, Stifel analyst Jeffrey Stantial highlights IGT\u2019s lottery unit, noting that business could […]<\/p>\n","protected":false},"author":46,"featured_media":216421,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,13699],"tags":[],"acf":[],"yoast_head":"\nIGT Lottery Unit Deserves More Attention From Investors<\/title>\n<meta name=\"description\" content=\"IGT's lottery unit generates cash and deserves more credit from investors, says an analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IGT Lottery Unit Deserves More Attention From Investors\" \/>\n<meta property=\"og:description\" content=\"IGT's lottery unit generates cash and deserves more credit from investors, says an analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-06-08T19:29:31+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-06-08T20:15:38+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/WOF.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2300\" \/>\n\t<meta property=\"og:image:height\" content=\"1532\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/\",\"url\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/\",\"name\":\"IGT Lottery Unit Deserves More Attention From Investors\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/WOF.jpg\",\"datePublished\":\"2022-06-08T19:29:31+00:00\",\"dateModified\":\"2022-06-08T20:15:38+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"IGT's lottery unit generates cash and deserves more credit from investors, says an analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/igt-lottery-unit-deserves-more-attention-from-investors\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/WOF.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/06\/WOF.jpg\",\"width\":2300,\"height\":1532,\"caption\":\"A bank of IGT's Wheel of Fortune slot machines. 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