{"id":321280,"date":"2024-05-30T15:02:12","date_gmt":"2024-05-30T20:02:12","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=321280"},"modified":"2024-05-31T09:22:12","modified_gmt":"2024-05-31T14:22:12","slug":"igt-upgraded-on-constructive-lottery-outlook","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/","title":{"rendered":"IGT Upgraded on Constructive Lottery Outlook"},"content":{"rendered":"

Shares of International Game Technology (NYSE: IGT) rallied Thursday after the stock landed an upgrade based on its lottery exposure and reduced risks in Italy.<\/p>\n

\"IGT
Texas Lottery scratch-off tickets produced by IGT. The stock was upgraded as analysts see a lower risk profile. (Image: Casino.org<\/em>)<\/figcaption><\/figure>\n

In a note to clients, Stifel analyst Jeffrey Stantial moved IGT to \u201cbuy\u201d from \u201chold\u201d while boosting his price target on the stock to $26 from $24. That new forecast implies upside of more than 30% from current levels. He said IGT\u2019s plan to spin off and merge its global gaming and PlayDigital units<\/a> with Everi (NYSE: EVRI) has been an overhang on the stock, but that headwind could abate when the deal closes.<\/p>\n

Despite the favorable update & healthy lottery trends reported at Q1, shares continue to trade lower which we think now primarily reflects mechanical overhang ahead of Gaming & Digital spin-off,\u201d wrote Stantial. \u201cWhile risk remains that IGT proves “dead money” ahead of close, we rather risk being too early than late (especially given 2H weighted lottery content launch cadence) while expected timing of close sits well within our NTM investment rating horizon.\u201d<\/p><\/blockquote>\n

Under the terms of the transaction, IGT investors will own 54% of the new company, while Everi shareholders will control the remainder. The merger is expected to close late this year or in early 2025.<\/p>\n

Reduced Risk in Italy Could Add to Case for IGT Shares<\/h2>\n

Shares of IGT are off 28.2% year to date and one of the reasons the stock has struggled is concern about the company\u2019s positioning in a retender for Italy\u2019s lottery rights.<\/p>\n

\n

That country, which is the Eurozone\u2019s third-largest economy, accounted for a significant chunk of IGT\u2019s 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) while representing an estimated 22% of adjusted EBITDA in the company\u2019s global lottery segment.<\/p>\n<\/div>\n

\u201cAs such, historically we’ve observed meaningful volatility for IGT shares during the contract bid process which alongside deal-related mechanical overhang (see below), led us to downgrade IGT on 3\/3 purely on timing with our underlying lottery re-rate thesis still intact,\u201d adds Stantial.<\/p>\n

However, IGT provided an encouraging update on the Italy retender during its first-quarter earnings update and, as Stantial observed, only Sisal<\/a> is likely to bid against IGT for the Italy contract — and that might not happen because parent Flutter Entertainment (NYSE: FLUT) could balk at allocating nearly $1.1 billion in upfront capital to procure the contract.<\/p>\n

IGT Might Deserve More Credit<\/h2>\n

When IGT announced a strategic review nearly a year ago, it was estimated that it could fetch $4 to $5 billion<\/a> in a sale of its global gaming and PlayDigital units, but the transaction with Everi is valued at $6.2 billion. That could be a sign that IGT deserves more credit for commanding a better-than-expected price.<\/p>\n

\n

The deal with Everi will allow the company to focus on its lucrative lottery business<\/a>. That\u2019s a segment that arguably doesn\u2019t get the credit it deserves from the investment community. Going forward, IGT might be able to reshape that view because it\u2019s becoming a more lottery-centric story with a cleaner investment thesis.<\/p>\n<\/div>\n

Analysts argue that when lottery assets are attached to conglomerate-like gaming companies, which is the case with IGT, they don\u2019t get the appreciation they should from market participants.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of International Game Technology (NYSE: IGT) rallied Thursday after the stock landed an upgrade based on its lottery exposure and reduced risks in Italy. In a note to clients, Stifel analyst Jeffrey Stantial moved IGT to \u201cbuy\u201d from \u201chold\u201d while boosting his price target on the stock to $26 from $24. That new forecast […]<\/p>\n","protected":false},"author":46,"featured_media":236372,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,13699],"tags":[81903,13701],"acf":[],"yoast_head":"\nIGT Upgraded on Constructive Lottery Outlook<\/title>\n<meta name=\"description\" content=\"IGT Upgraded on Constructive Lottery Outlook.\" \/>\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-upgraded-on-constructive-lottery-outlook\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IGT Upgraded on Constructive Lottery Outlook\" \/>\n<meta property=\"og:description\" content=\"IGT Upgraded on Constructive Lottery Outlook.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/\" \/>\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=\"2024-05-30T20:02:12+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-31T14:22:12+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/maxresdefault.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\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=\"3 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-upgraded-on-constructive-lottery-outlook\/\",\"url\":\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/\",\"name\":\"IGT Upgraded on Constructive Lottery Outlook\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/maxresdefault.jpg\",\"datePublished\":\"2024-05-30T20:02:12+00:00\",\"dateModified\":\"2024-05-31T14:22:12+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"IGT Upgraded on Constructive Lottery Outlook.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/igt-upgraded-on-constructive-lottery-outlook\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/maxresdefault.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/10\/maxresdefault.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Texas Lottery scratch-off tickets produced by IGT. 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