We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Bull of the Day: International Game Technology (IGT)
Read MoreHide Full Article
International Game Technology (IGT - Free Report) is a Zacks Rank #1 (Strong Buy) that operates and provides gaming technology products and services. The company is engaged in design, development, manufacture and marketing of casino-style gaming equipment, systems technology, and game content.
Like many stocks in 2022, IGT struggled for most of the year. However, the bulls came back into the name in the fourth quarter. The stock rallied about 50% off its September lows and closed down 20% on the year.
So far in 2023, the buyers have showed their presence, taking the stock higher by 7% to start the year.
Reason for the bullishness over the last few months was a strong earnings report back in November. If the company can continue its earnings trend, there is reason to believe the stock can continue higher and be a big winner in 2023.
More about IGT
The company was founded in 2014 and is headquartered in London, England. It employs over 10,000 people and has a market cap of $5 billion.
IGT operates in three segments: Global Lottery, Global Gaming, and Digital & Betting.
The stock has a Zacks Style Score of “B” in Value, but “D” in Momentum. The Forward PE is 16 and the stock pays a 3.3% dividend.
Q3 Earnings
In November of last year, the company reported a massive 441% earnings beat. This was the third straight EPS beat and the largest upside surprise since May of 2021.
Q3 came in at $0.43 v the $0.25 expected. Revenue also beat, coming in at $1.06B v the $1.01B expected. Q4 revenues were guided at $1.0B v the 1.01B expected and IGT affirmed FY22 revenues at $4.1-4.2B v the $4.09B expected.
Operating margins for Q4 are expected to come in at 18-19% for Q4 and 20-22% for FY22.
Management expects net debt leverage to improve 3.1x, which is the lowest in company history. Moreover, they say that customer and player demand trends remain encouraging.
After the earnings release, investors cheered the stock higher. IGT jumped 20% higher, going from just over $20 to $24.50
Estimates Rising
Estimates have been trending higher since that earnings report. Over the last 90 days, analyst have taken their numbers higher for all time frames.
For the current quarter, we see estimates jumping 23%, from $0.21 to $0.26. For the current year, estimates have been taken 134% higher, from $0.82 to $1.92.
Looking to the long-term, the trend continues. For next year, estimates have gone from $1.27 to $1.49, or 17%.
The stock saw a price upgrade right after the report as Susquehanna took its targets from $22 to $25. More recently, Société Générale reiterated its Hold rating, but took its price target higher from $22.60 to $24.90.
The Technical Take
The stock has been all over the place over the last two years, but is currently trading in the middle of its trading range during that period. The question for investors is if this stock will see sideways trading or if price will get back to the 2021 highs near $33.
The good news is that the recent earnings strength has taken the stock over all its major moving averages. For those looking for dips to MA support levels, the 200-day is at $20.75 and the 50-day is at $23.40.
It might take a while for the stock to break out of its base after gapping higher. In the meantime, investors should feel good being long the stock if it stays above $20.
In Summary
International Game Technology has started the year off right. Investors are clearly excited for what this stock might bring in 2023. While IGT might experience some sideways trading, the company pays a nice dividend while the story plays out.
If earnings momentum can continue over the next couple quarters, look for the stock to take out 2022 highs and be one of the top performing names in 2023.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bull of the Day: International Game Technology (IGT)
International Game Technology (IGT - Free Report) is a Zacks Rank #1 (Strong Buy) that operates and provides gaming technology products and services. The company is engaged in design, development, manufacture and marketing of casino-style gaming equipment, systems technology, and game content.
Like many stocks in 2022, IGT struggled for most of the year. However, the bulls came back into the name in the fourth quarter. The stock rallied about 50% off its September lows and closed down 20% on the year.
So far in 2023, the buyers have showed their presence, taking the stock higher by 7% to start the year.
Reason for the bullishness over the last few months was a strong earnings report back in November. If the company can continue its earnings trend, there is reason to believe the stock can continue higher and be a big winner in 2023.
More about IGT
The company was founded in 2014 and is headquartered in London, England. It employs over 10,000 people and has a market cap of $5 billion.
IGT operates in three segments: Global Lottery, Global Gaming, and Digital & Betting.
The stock has a Zacks Style Score of “B” in Value, but “D” in Momentum. The Forward PE is 16 and the stock pays a 3.3% dividend.
Q3 Earnings
In November of last year, the company reported a massive 441% earnings beat. This was the third straight EPS beat and the largest upside surprise since May of 2021.
Q3 came in at $0.43 v the $0.25 expected. Revenue also beat, coming in at $1.06B v the $1.01B expected. Q4 revenues were guided at $1.0B v the 1.01B expected and IGT affirmed FY22 revenues at $4.1-4.2B v the $4.09B expected.
Operating margins for Q4 are expected to come in at 18-19% for Q4 and 20-22% for FY22.
Management expects net debt leverage to improve 3.1x, which is the lowest in company history. Moreover, they say that customer and player demand trends remain encouraging.
After the earnings release, investors cheered the stock higher. IGT jumped 20% higher, going from just over $20 to $24.50
Estimates Rising
Estimates have been trending higher since that earnings report. Over the last 90 days, analyst have taken their numbers higher for all time frames.
For the current quarter, we see estimates jumping 23%, from $0.21 to $0.26. For the current year, estimates have been taken 134% higher, from $0.82 to $1.92.
Looking to the long-term, the trend continues. For next year, estimates have gone from $1.27 to $1.49, or 17%.
The stock saw a price upgrade right after the report as Susquehanna took its targets from $22 to $25. More recently, Société Générale reiterated its Hold rating, but took its price target higher from $22.60 to $24.90.
The Technical Take
The stock has been all over the place over the last two years, but is currently trading in the middle of its trading range during that period. The question for investors is if this stock will see sideways trading or if price will get back to the 2021 highs near $33.
The good news is that the recent earnings strength has taken the stock over all its major moving averages. For those looking for dips to MA support levels, the 200-day is at $20.75 and the 50-day is at $23.40.
It might take a while for the stock to break out of its base after gapping higher. In the meantime, investors should feel good being long the stock if it stays above $20.
In Summary
International Game Technology has started the year off right. Investors are clearly excited for what this stock might bring in 2023. While IGT might experience some sideways trading, the company pays a nice dividend while the story plays out.
If earnings momentum can continue over the next couple quarters, look for the stock to take out 2022 highs and be one of the top performing names in 2023.