(IGT article updated with stock prices.)
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 - Get Report) 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 - Get Report), and could give a better picture on how casinos will buy gaming technologies in 2010. - Reported by Jeanine Poggi in New York. Follow TheStreet.com on Twitter and become a fan on Facebook.