This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Competition Heats Up for International Game

At recent levels between $28 and $29, shares are about 40% below last April's high.

Expectations for lower U.S. slot sales have prompted some analysts to pare estimates for IGT. Last week, Bear Stearns' Joseph Greff reduced his fiscal 2005 EPS estimate to $1.29 from $1.36. The average Wall Street estimate is $1.33, according to Thomson First Call.

Greff also cut his fiscal 2006 EPS estimate to $1.52 from $1.62 and below the consensus of $1.63. Bear Stearns does and seeks to do business with companies covered in its research reports.

In a research note, Greff recommended opportunistic purchases of IGT shares if they fall further -- to between $26 and $27 -- but he expressed concern about WMS and Aristocrat taking market share. Recent interviews with Atlantic City, N.J., slot managers reveal that they are severely scaling back machine orders and shifting market share to WMS and Aristocrat, according to Greff.

Meanwhile, positive developments at IGT may already be accounted for. "While the installed base backlog looks encouraging, as does newer slot product ( Fort Knox, Star Wars, Video Megabucks), which should generate gradual gains, we think this is baked into our new estimates and doesn't really serve as upside EPS," wrote Greff, who rates IGT at peer perform.

Last month, after Aristocrat reported second-half 2004 results, Merrill Lynch analyst David Anders estimated that IGT's market share of casino devices sold slipped to 56%. He attributed the shift to the strength of Aristocrat's penny-denominated slots, but he noted that IGT was losing market share in participation games, in which multiple slot machines are linked and players pay into a group jackpot. Anders estimated that IGT's share of the participation games market fell to 64%.

"Importantly, Aristocrat mentioned that it is not seeing a significant competitive response from other gaming equipment suppliers," Anders wrote in a research note. "Furthermore, we expect Aristocrat to remain aggressive on the North American participation game business. ... We believe that these results highlight that the competitive environment has meaningfully increased and maintaining share will be challenging going forward." Merrill Lynch does and seeks to do business with companies covered in its research reports.
2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AGI $3.82 -7.06%
ASX $5.04 -2.14%
IGT $13.04 -1.21%
WMS $18.83 -0.84%
AAPL $94.99 -0.02%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs