IGT and L&W Represent a Golden Opportunity for Investors

Over the last few years, a notable increase in the cost of living was observed. Contrary to popular belief, many investors actually make money during a recession which is why investments continue to be popular. The gambling sector is one vertical for investors, but lottery and gaming-related businesses can also bring benefits for investors, a new report reveals.

According to David Bain, an analyst for B. Riley, the popular and fast-growing gaming companies Light & Wonder and International Game Technology (IGT) represent good opportunities for investors. The analyst acknowledged the rating of Light & Wonder as “neutral.” However, Bain pointed to the potential of IGT, explaining that the company has a “buy” grade with a price objective of $43.

As a gaming device manufacturer and provider of solutions for the gambling industry, IGT is globally recognized. The company continues to grow and only recently, released its financial report revealing its performance for the fourth quarter and 2022.

At the time, IGT reported a revenue increase of 3% to $4.2 billion for the full year 2022. Besides the increase in revenue, the company explained its operating income in 2022 hit $922 million, representing an increase of 22%. Similarly positive were the results for the fourth quarter, with total revenue hitting $1.1 billion, up by 4% and operating income increasing 21% to $230 million.

A Good Bargain

The financial results reaffirm the analyst’s view about IGT’s potential for investors. Moreover, Bain outlined that the company’s lottery solutions and systems are being used by 8 out of the world’s top 10 lotteries. “The average customer relationship duration is measured in decades, and IGT has been successful in converting 100% of top 10 incumbent rebids. Lottery is known for its significant size, recurring nature (IGT lottery revenue is ~90% recurring), and economic resiliency,” he explained.

“IGT’s lottery systems and solutions are used by 8 of the top 10 largest lotteries globally.“

David Bain, analyst for B. Riley

Although IGT holds potential for investors, Bain explained that its stocks actually trade below other companies within its peer group. “Yet, IGT trades 20% below the casino supplier peer average,” pointed out the analyst. Finally, Bain predicted that “real-time strength across each of IGT’s categories” may result in re-rating from the investors.