Published on: January 13, 2025, 07:27h.
Last updated on: January 13, 2025, 07:32h.
International Game Technology (NYSE: IGT) has seen a decline in its shares by one-third in the past year. However, the stock could benefit from clarity from the Italian lottery, one of its key clients.
Italy’s gaming regulator recently released request for proposal (RFP) documents, which analyst Jeffrey Stantial believes are positive for IGT. He rates the stock a “buy” with a price target of $26, indicating more than 50% upside from the current price. IGT’s contract with the Italian lottery is through a joint venture with Allwyn and contributes significantly to the company’s earnings.
Allwyn’s disclosures show that the contract contributed a substantial amount to IGT’s revenues in 2023, making it an important part of the company’s earnings.
The deadline for submissions is March 17, which the analyst believes could favor IGT as the incumbent because that might not be enough for rivals to formulate adequate, competing proposals.
IGT Faces Competition for Italy Lottery Contract
IGT has been operating Italy’s lottery for over 30 years, giving it an advantage in securing a new bid. However, Flutter Entertainment (NYSE: FLUT) is expected to compete for the contract as well.
Dublin-based Flutter already has a presence in Italy through acquisitions and could pose a threat to IGT in winning the lottery contract.
“Italy is an attractive market for gaming companies due to its size and economic importance,” states Stantial.
IGT Could Have Some Advantages
While other bidders may emerge for the Italy contract, IGT’s experience and technology ownership could give it an edge in retaining the agreement.
“The scoring matrix for the proposal may benefit IGT given its incumbency and expertise in lottery operations,” concludes Stantial.