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IGT’s Stock Rating Lowered amid Ongoing Strategic Review
Jefferies downgraded the company's rating from "buy" to "hold," decreasing the price target to $29 from $36
The globally recognized gaming company, International Game Technology (IGT), observed a dip in its shares after its stock rating was downgraded Thursday. The decision to downgrade the stock by Jefferies came amid concerns about the slow progress of the announced strategic review by IGT.
This saw Jefferies downgrade its rating for the leading gaming company from “buy” to “hold.” At the same time, the research company’s price target for IGT was decreased from $36 to $29. Still, considering Jefferies target price, an upside of approximately 11% is possible.
Back in June, IGT unveiled details regarding a strategic review of its PlayDigital and global gaming units. At the time, the company confirmed it plans to explore different options, not excluding potential mergers, spin-offs or divestment of assets. While the strategic review is ongoing, Jefferies anticipated that progress or clarity for those processes soon is unlikely.
Potential Divestment of Assets Still Possible
Last year, media reports hinted Apollo Asset Management, a leading provider of alternative asset management and retirement solutions, may potentially be interested in IGT’s global gaming division. Reportedly a transaction of that scale could be in the range between $4 billion and $5 billion.
It is not uncommon for gaming operators to offload certain assets. Divesting assets enables such companies to change their focus and strengthen their other operations. A notable example within that scope is the sale of PointsBet’s US-facing assets.
Last summer, PointsBet’s shareholders voted in favor of selling the company’s US assets to Fanatics in a deal with a $225 million price tag. Fanatics’ initial proposal was $150 million but after DraftKings tabled a proposal for $195 million, the company upgraded its bid to $225 million.
In 2023, IGT’s shares enjoyed a strong momentum for several months. However, a downward trend was observed in the fourth quarter. This trend continued with the start of the new year.
Jerome is a welcome new addition to the Gambling News team, bringing years of journalistic experience within the iGaming sector. His interest in the industry begun after he graduated from college where he played in regular local poker tournaments which eventually lead to exposure towards the growing popularity of online poker and casino rooms. Jerome now puts all the knowledge he's accrued to fuel his passion for journalism, providing our team with the latest scoops online.
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April 24, 2024