On Friday, Truist Securities revised its stance on International Game Technology (NYSE:IGT), downgrading the stock from Buy to Hold, while also reducing the price target to $30 from the previous $32. The adjustment comes amidst concerns about the near-term challenges associated with the IGT and Everi Holdings (NYSE:EVRI) Inc. merger.
The analyst from Truist Securities expressed optimism about the long-term prospects of the merger between IGT and Everi Holdings Inc. (EVRI). However, they indicated that there are substantial execution risks in the short term. The merger, which is anticipated to offer strategic benefits, is not expected to be finalized for almost a year, creating a period of uncertainty for investors.
The firm also adjusted its expectations for Everi Holdings, lowering the 2024 and 2025 EBITDA estimates by 2% and 4%, respectively. This revision reflects a cautious stance on the company's earnings and guidance.
Consequently, the price targets for both Everi Holdings and International Game Technology have been lowered, with Everi's target moving to $13 from $14, alongside IGT's decrease.
Truist Securities highlighted that the stocks of both companies are likely to be range-bound in the short term. Investors are anticipated to seek clarity on the integration process and the realization of potential synergies from the merger.
Additionally, there is a specific concern regarding the renewal of the Italian Lotto, which adds another layer of uncertainty for IGT.
In sum, the current view from Truist Securities suggests a more neutral position on IGT's stock, as the market awaits further developments on the merger with Everi Holdings and navigates through the near-term risks and uncertainties.
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