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On Wednesday, Stifel analysts revised their outlook for International Game Technology (NYSE:IGT), reducing the price target from $22.00 to $20.00, while still recommending the stock as a Buy. Currently trading at $15.52, IGT maintains a significant dividend yield of 5.15% and has sustained dividend payments for 11 consecutive years. According to InvestingPro data, analyst targets for IGT range from $18 to $26, suggesting potential upside despite recent volatility. The adjustment follows a conference call held on Tuesday by IGT, which focused on the company’s recent Lotto tender win. During the call, IGT’s management delved into the digital growth opportunities, particularly highlighting their five-year penetration goals for iLottery and strategies for expanding into other online betting and casino markets.
The analysts noted that while the digital expansion and cross-selling initiatives could contribute to IGT’s financial targets, the high licensing fee remains a concern. Furthermore, the company’s management did not provide specific details regarding the return of capital to shareholders, indicating that more information would be available after the completion of the G&D sale.
Stifel’s report expressed some confusion regarding the economic benefits of the iLottery venture, as well as concerns about the potential risks associated with entering the online sports betting and casino (OSB/iCasino) sectors. Despite these challenges, the firm’s analysts believe that IGT’s return targets, although optimistic, are attainable without relying solely on the Lotto contract’s returns. The company has demonstrated strong revenue growth of 14.38% over the last twelve months, with EBITDA reaching $842 million. For comprehensive analysis and detailed financial metrics, investors can access IGT’s full research report on InvestingPro.
The revised price target reflects Stifel’s updated financial model for IGT, which now accounts for the increased license fee. The analysts reiterated their positive stance on the stock, maintaining a Buy rating based on their assessment of the company’s broader market opportunities and growth potential.
In other recent news, International Game Technology PLC (IGT) reported first-quarter earnings that did not meet analyst expectations. The company announced adjusted earnings per share of $0.09, missing the consensus estimate of $0.27. Revenue for the quarter was reported at $583 million, falling short of the expected $636.61 million and marking a 12% decrease compared to the previous year. IGT attributed these results to lower U.S. multi-state jackpot activity and the timing of product sales. Additionally, the company revised its full-year revenue and profit outlook downward, now expecting revenue of approximately $2.55 billion, which is below the analyst consensus of $2.573 billion. CEO Vince Sadusky noted the ongoing expansion in global sales of instant ticket and draw games, driven by game innovation and portfolio optimization. Despite these efforts, IGT anticipates being at the low end of its original guidance ranges due to the challenging macroeconomic environment. These developments highlight the company’s current financial challenges and strategic adjustments.
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