International Game Tech stock rises as Stifel reiterates Buy rating

Investing.com - International Game Tech (NYSE:IGT), now rebranded as Brightstar Lottery (BRSL), announced Tuesday the completion of its Gaming & Digital Business sale to Apollo Global Management (NYSE:APO) for $4.05 billion in cash.

The company revealed capital return plans alongside the deal closure, comprising a $500 million two-year share repurchase authorization and a $3 per share special dividend, totaling $1.1 billion in shareholder returns. According to InvestingPro data, IGT has maintained dividend payments for 11 consecutive years, with the company’s strong liquidity position reflected in a healthy current ratio of 2.48.

Stifel maintained its Buy rating and $20.00 price target on the stock, noting the capital return plan exceeded average investor expectations of approximately $500 million, though market reaction was described as "surprisingly measured."

The transaction’s timing aligned with recent media reports, and the company has now officially rebranded following the divestiture of its gaming and digital segments.

Stifel’s analysis suggests the current valuation remains "slightly conservative" based on free cash flow considerations, with the investment thesis now shifting toward "positive estimate momentum" for the lottery-focused business.

In other recent news, International Game Technology PLC (IGT) reported first-quarter earnings that did not meet analyst expectations. The company posted adjusted earnings per share of $0.09, falling short of the anticipated $0.27. Revenue for the quarter was $583 million, below the forecasted $636.61 million and marking a 12% decrease from the previous year. IGT attributed the shortfall to reduced U.S. multi-state jackpot activity and product sales timing. Additionally, the company adjusted its full-year revenue outlook to approximately $2.55 billion, which is below the prior expectation of $2.573 billion.

In other developments, IGT has signed an eight-year agreement to provide its IntelligenEVO video lottery central system technology to Atlantic Lottery in Atlantic Canada. This deal includes options for multiple extensions and introduces IGT’s next-generation technology to the World Lottery Association-affiliated operator. Furthermore, Stifel analysts have maintained a Buy rating on IGT stock, though they have revised the price target from $22.00 to $20.00. The analysts pointed out potential growth in digital sectors, despite some risks and high licensing fees. They also noted that IGT’s management remains optimistic about future prospects, particularly in digital growth areas and capital returns from Gaming & Digital segments.

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