On Tuesday, International Game Technology PLC (NYSE:IGT) maintained its hold rating and a price target of $24.00, according to Stifel. The firm's analysis followed IGT's first-quarter earnings report, which revealed adjusted EBITDA increased by 7%, exceeding consensus expectations. This growth was primarily attributed to strong same-store sales in the Global Lottery segment, particularly in Italy and North America/Rest of the World, alongside robust product sales.
However, IGT's Gaming & Digital segment did not fare as well, missing margin expectations and showing mixed performance at the key performance indicator (KPI) level compared to consensus. Despite this, the company has raised its full-year 2024 revenue guidance by 1% at the midpoint, with operating income expected to increase by 4%. This guidance update comes just two months after the initial forecast was set during the fourth-quarter earnings announcement.
The company also provided second-quarter revenue guidance, which is projected to be 3% below consensus. This suggests that the financial performance for the fiscal year 2024 might be more heavily weighted towards the latter half.
A significant development in IGT's strategic positioning was the announcement of signed memorandums of understanding (MOUs) with members of the Italy Lotto joint venture. These MOUs indicate an intention to maintain the current joint venture structure and economics for the upcoming tender. This move potentially eliminates a bid from Allwyn, considered the most credible competitor, while continuing the minority interest accounting practice.
Stifel concluded that the balance of factors leans towards the positive for IGT, anticipating that the company's shares would trade higher on Tuesday. The firm also indicated that its model and target price for IGT are under review and that further insights would be shared following the company's earnings call scheduled for 8 AM ET.
InvestingPro Insights
As International Game Technology PLC (IGT) navigates through a mixed financial landscape, real-time data from InvestingPro provides a clearer picture of the company's market standing. With a market capitalization of $4.24 billion and a price-to-earnings (P/E) ratio of 23.54, IGT shows a significant presence in its sector. Notably, the adjusted P/E ratio for the last twelve months as of Q4 2023 stands at a slightly lower 21.11, indicating a nuanced valuation perspective for investors.
InvestingPro Tips suggest that analysts are optimistic about IGT's sales growth in the current year, which aligns with the company's recent guidance update. Additionally, the dividend yield of 4.0% as of March 25, 2024, underscores IGT's commitment to returning value to shareholders, having maintained dividend payments for 10 consecutive years. However, investors should be aware of the stock's volatility, as evidenced by a 23.72% decline in the three-month price total return and a 25.11% drop over the last six months.
With these insights, those looking to delve deeper into IGT's financial health can explore further with InvestingPro. For a more comprehensive analysis, readers can take advantage of the additional tips available on the platform, using the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription. Currently, InvestingPro offers several additional tips for IGT at https://www.investing.com/pro/IGT.
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