Get Out of Gaming Technologies: Analysts
NEW YORK (
) -- Gaming technology is not the place to be, according to analysts who downgraded companies in the sector on Thursday.
Goldman Sachs
, for one, said casino equipment makers are contending with the slow replacement cycle of slot machines and other games due to the economy.
"We believe that (casino) floors are due to be updated, but may not be until more capital is available or there is a technological reason to do so," analyst Steven Kent wrote in a note.
He also expressed concern that slot machines that can download content are being delayed. As a result, Kent cut his rating on the entire sector to neutral from attractive.
J.P. Morgan analyst Joseph Greff also lowered his estimates and price target on
International Game Technology
(IGT) - Get Report
.
"While many casino operators indicate willingness and indeed a budget to spend a little more this year than last year, we don't believe the spending has happened yet and it is prudent to reflect this in our fiscal 2010 estimates," Greff wrote in a note.
Greff also cites the shuttering of Alabama Class II casinos, which the state considers illegal gambling.
He lowered his price target on IGT to $21 from $24. Greff now expects second-quarter earnings of 19 cents a share from a prior forecast of 22 cents and full-year earnings of 86 cents a share from a prior outlook of 97 cents.
On a very related note, Shares of
Bally Technologies
(BYI)
are tanking 6.2% to $38.67, IGT is tumbling 4.6% to $16.98 and
WMS Industries
(WMS) - Get Report
is declining 2% to $38.57.
-- Reported by Jeanine Poggi in New York.
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