Another Recession Casualty: International Game Technology (IGT)

Citi had remained steadfastly bullish as International Game Technology (IGT) dropped 50% throughout the year. But today that changed after the gaming equipment company failed to impress with its quarterly earnings and guidance.

Citi has removed the stock from its “Top Picks Live” and downgraded IGT to HOLD on a trend that is becoming more apparent as banks finally stop predicting V-shaped economic recoveries. As with Goldman on Best Buy (BBY) yesterday, Citi downgraded IGT and slashed the target not because it dislikes the company but because the economy is too poor to warrant anything else:

IGT has a high quality biz model. Its SB Gaming product is impressive and should stimulate a future replacement cycle. However, its biz is proving more sensitive to the economy than we previously appreciated, which reduces EPS visibility, and creates uncertainty re: timing of SB adoption. Valuation is reasonable at 18x cyclically low ’09 EPS (avg. is 20x), but no catalyst in next 12 mos. Good oppt’y for value oriented investors w/longer-term view.

Citi downgrades International Game Technology (IGT) from Buy to HOLD, target price cut from $45 to $25.

See Also:
Citi: Don’t Go Near Las Vegas Sands (LVS) or Gaming Industry

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at