On November 13, 2023, shares of International Game Technology (NYSE: IGT) dropped by 13.37% over the past month and are now 22% lower than the stock’s 52-week high, reaching bear market territory. However, an analyst believes that this decline is due to speculation rather than the company’s fundamentals. Stifel analyst Jeffrey Stantial recently rated IGT as a “buy” with a price target of $35, indicating a potential upside of 32% from the current closing price. Stantial highlighted the company’s steady slot upgrade cycle and cited a robust pipeline through the end of the year, though he acknowledged limited long-term visibility.
IGT, a manufacturer of popular slot machines such as Wheel of Fortune, has also seen success in its lottery business, which accounts for 75% of pro-forma earnings. Despite concerns about “jackpot fatigue,” IGT’s lottery business has seen strong sales, especially in the US. Stantial pointed out that lottery sales historically remain resilient even during times of economic downturn.
In June, IGT announced it was considering strategic alternatives for its global gaming and PlayDigital units, including potential sales of those units. If IGT proceeds with divesting those businesses, the company would focus more on its highly profitable lottery unit, potentially attracting more investor interest. Stantial believes that IGT can thrive in an increasingly competitive landscape, with momentum continuing into 2024.
Overall, Stantial’s report suggests that IGT’s recent stock decline may be an opportunity for investors, with the potential for a significant rebound in the near future.