IGT Drags In The Market
A Goldman Sachs analyst, Steven Kent, has lowered his investment rating on International Game Technology (IGT: 15.02 0.00%) today from “Buy” to “Neutral” on concerns of the companies’ limited visibility.
Company executives said during last weeks first quarter conference call that they had “limited visibility” on the product replacement cycle.
Which Kent explained to clients in a research note, he believes to mean “that the early stages of this rebound are not as dramatic as we would expect.”
IGT is one of several gaming suppliers that rely heavily on casino operators replacing aging machines for new updated models.
However with the ailing economy slow to recover casino’s are replacing machines at a much slower pace.
“We are increasingly concerned that regional markets will remain weak, and given that 60 percent to 65 percent of IGT’s earnings come from gaming operations, this could be a drag on results,” Steven Kent wrote.
The news dragged down shares of IGT in afternoon trading 3.2% to $19.99.
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