Markets & Finance

Merrill Ups International Game Technology to 'Buy'

Merrill Lynch upgraded International Game Technology (IGT) to buy from neutral.

Analyst David Anders says International Game Technology will sell a minimum of 11,000 ticket-in-ticket-out slot machines to Harrah's, which raises IGT's fiscal 2004 (Sept.) expected replacement demand to roughly 65,000 machines. He says he had been concerned that replacement demand would level off in fiscal 2004, which would concern investors and limit the valuation awarded to International Game Technology.

However, with this announcement, he now thinks IGT easily has another four quarters of growth in replacement demand, which will likely sustain, if not permit, further valuation expansion. Anders raised the $1.26 fiscal 2004 earnings per share estimate to $1.32. He has a $33 12-month target.

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