IGT Drags Down Sector

(IGT article updated with stock prices.)

NEW YORK (TheStreet) -- International Game Technologies(IGT) saw its rating cut by Goldman Sachs on Monday, on pessimism in the regional gaming market and product replacement.

The news sent shares sinking 3.2% to $19.99 in afternoon trading and dragged down shares of other gaming technology makers. Bally Technologies(BYI) is off 0.4% to $43.90, WMS Industries is falling 0.7% to $40.80 and Suffle Master>(SHFL) is dropping 4.3% to $8.64.

The brokerage firm lowered its rating to neutral from buy and cut its price target to $23 from $26.

"We are increasingly concerned that regional markets will remain weak, and given that 60% to 65% of IGT's earnings come from gaming operations, this could be a drag on results," analyst Steven Kent wrote in a note.

Goldman is also concerned about IGT's comments regarding its "limited visibility" in product replacement cycle.

Last week the slot machine maker reported a 20% gain in first-quarter earnings, surpassing Wall Street's estimates.

The earning season for casino operators starts next week with Penn National Gaming(PENN), and could give a better picture on how casinos will buy gaming technologies in 2010.

-Reported by Jeanine Poggi in New York.

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