Stifel reaffirms Buy rating on International Game Tech stock

Published 04/06/2025, 14:48
Stifel reaffirms Buy rating on International Game Tech stock

On Wednesday, Stifel analysts maintained their Buy rating for International Game Tech (NYSE: IGT) stock, keeping the price target at $20.00. Currently trading at $14.53, near its 52-week low of $13.81, the stock offers a notable 5.5% dividend yield. This decision follows a series of investor meetings involving IGT’s Chief Financial Officer and Investor Relations team at Stifel’s annual Cross Sector Insight Conference. InvestingPro analysis shows the company has maintained dividend payments for 11 consecutive years.

The analysts highlighted several key insights from the discussions, noting that IGT management continues to uphold return projections for a recently secured Lotto contract. With revenue of $2.43 billion and a healthy current ratio of 2.48, the company’s liquid assets exceed short-term obligations. Although there is recognition of higher risks and uncertainties linked to new digital growth areas, the company remains optimistic about its prospects.

Further commentary from IGT management suggested potential upside in leverage and stabilized earnings power, which could positively impact the return of capital from Gaming & Digital (G&D) segments. Despite some challenges, IGT attributes the flat performance in North American core sales during the first quarter and early second quarter to broader macroeconomic factors.

While previous expectations regarding the Lotto contract’s risk/reward balance did not materialize as anticipated, Stifel analysts remain positive on IGT shares. They see potential for the stock to reach over $20 per share, driven by cycle-normalized free cash flow projections exceeding $1.50 per share.

The analysts also noted that the anticipated return of capital from G&D activities could serve as a positive catalyst. They expect an increase in share repurchases following the completion of the current capital expenditure cycle, reinforcing their Buy rating on IGT stock.

In other recent news, International Game Technology (NYSE:IGT) reported first-quarter earnings that did not meet analyst expectations, citing lower U.S. multi-state jackpot activity and product sales timing as key factors. The company posted adjusted earnings per share of $0.09, falling short of the analyst consensus estimate of $0.27. Revenue for the quarter was $583 million, below the expected $636.61 million and representing a 12% decline year-over-year. Additionally, IGT lowered its full-year revenue and profit guidance, now anticipating revenue of approximately $2.55 billion, which is below the previous outlook and the $2.573 billion analyst consensus.

In other developments, Stifel analysts revised their outlook for IGT, reducing the stock price target from $22.00 to $20.00 while maintaining a Buy rating. This adjustment followed a conference call where IGT management discussed digital growth opportunities and a recent Lotto tender win. The analysts expressed concerns about high licensing fees and the risks of entering online sports betting and casino markets, though they remain optimistic about IGT’s return targets. Stifel’s updated financial model for IGT now accounts for increased license fees, yet they continue to see broader market opportunities and growth potential for the company.

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