IGT’s slot machines gaining favor with casinos, says Deutsche Bank

IGT's slot machines gaining favor with casinos, says Deutsche Bank

International Gaming Technology Plc (IGT) saw its forecast for the third and fourth quarters cut by Union Gaming a few days ago based on an expected slow growth rate. That slowdown may turn around much sooner than expected if the latest reports from Deutsche Bank AG are correct.

IGT's slot machines gaining favor with casinos, says Deutsche BankDeutsche Bank’s U.S.-based stock brokerage indicates that casino operators are giving positive feedback for IGT’s slot machine products. A note issued this past Wednesday outlined the position and was drawn on discussions Deutsche Bank had with casino operators prior to a recent casino industry trade show. According to the note, “The feedback on IGT’s for-sale product was very favourable.”

Deutsche Bank analysts Danny Valoy and Carlo Santarelli added, “Operators noted… specifically the product coming from the legacy GTech studios, has played very well, which has helped IGT drive increasing ship share in casino-operator-purchased video product in 2018.”

GTech merged with IGT three years ago. GTech had been the suitor in the merger, but they settled on using the IGT name.

The analysts further noted that, according to IGT, the company was receiving significant customer feedback and using it to improve the development of its machines, particularly the premium products. They added that IGT management pointed out that customers had expressed satisfaction with the add-ons being incorporated into the company’s systems technology.

“IGT believes its ability to provide scalable solutions for smaller-to-medium-size casino operators represents an incremental opportunity to address a previously underserved customer base,” explained Deutsche Bank.

IGT has said that it anticipates selling 6,000 slot machines to Sweden. Of this order, 4,000 are expected to be delivered before the end of this year. The company’s financial results for any remaining machines in the order will be reflected in the subsequent quarter of delivery, more than likely Q1 2019.

Deutsche Bank also indicated that IGT is expecting a significant turnover of machines in the Canadian market. The firm anticipates replacing as many as 35,000 machines between 2019 and 2021.

Just like Union Gaming, Deutsche Bank remains positive on the future of IGT. It gave it a “buy” recommendation with a target share price of $35.