IGT
Lottery
Unit
Deserves
More
Attention
From
Investors
Last
updated
on:
June
8,
2022,
01:15h.
Todd
Shriber
@etfgodfather
Read
More
Expertise:
Financial,
Gaming
Business,
Mergers
and
Acquisitions.
International
Game
Technology
(NYSE:IGT)
is
the
maker
of
the
famous
Wheel
of
Fortune
slot
machine,
and
has
budding
exposure
to
iGaming,
among
other
pursuits.
But
an
analyst
argues
investors
shouldn’t
lose
sight
of
the
company’s
thriving
lottery
business.
A
bank
of
IGT’s
Wheel
of
Fortune
slot
machines.
An
analyst
says
IGT’s
lottery
business
deserves
more
credit.
(Image:
Las
Vegas
Weekly)
In
a
report
to
clients,
Stifel
analyst
Jeffrey
Stantial
highlights
IGT’s
lottery
unit,
noting
that
business
could
prove
durable
even
if
the
economy
slumps.
He
points
out
that
lottery
accounts
for
75%
of
IGT’s
pro
forma
earnings,
but
commands
just
25%
of
the
focus
the
investment
community
pays
to
the
gaming
company.
Our
constructive
view
on
the
shares
remains
anchored
by
a
valuation
dislocation
for
IGT’s
cash
generative,
recession
resilient,
and
fundamentally
accelerating
lottery
business
with
disproportionate
focus
paid
to
IGT’s
smaller
iGaming
business,”
writes
the
analyst.
Stantial
reiterates
a
“buy”
rating
on
IGT
with
a
$36
price
target,
implying
upside
of
63.6%
from
June
7
close.
The
shares
are
down
23.66%
year-to-date.
IGT
Lottery
Fighting
Conglomerate
Discount
Blues
Part
of
the
reason
IGT’s
lottery
arm
may
not
be
getting
the
credit
it
deserves
is
that
the
company
has
other
operations,
making
it
a
gaming
conglomerate
of
sorts.
The
thesis
that
IGT
stock
is
receiving
a
conglomerate
discount
isn’t
unreasonable.
Lottery
assets
are
cash
generators
and
desirable
in
the
investment
community,
but
often
don’t
get
full
credit
when
the
parent
company
has
other
lines
of
business.
Stifel’s
Stantial
calls
the
valuation
gap
between
IGT
and
publicly
traded
Australian
and
European
peers
“overly
punitive,”
but
acknowledges
it’s
closing.
Still,
there’s
no
getting
around
the
fact
that
in
the
gaming
industry,
lottery
is
on...
casino.org
Jun 15, 2022