Slot Machine Stocks Inexpensive, M&A Could Perk Up, Says Analyst
Posted on: October 16, 2023, 04:26h.
Last updated on: October 16, 2023, 04:32h.
Following the Global Gaming Expo (G23), which took place last week in Las Vegas, some sell-side analysts came away more constructive on various gaming equities, including slot machine stocks.

In a new report to clients, Stifel’s Jeffrey Stantial observed that shares of some slot machine manufacturers and select casino operators are trading “near trough multiples,” and mergers and acquisitions chatter was elevated at G2E. Amid limited signs of deteriorating demand, the analyst said his preferred slot machine stock ideas into the year-end are International Game Technology (NYSE: IGT) and small-cap name PlayAGS (NYSE: AGS).
Most slot managers we spoke with cited largely stable NTM purchasing intentions, barring a material pullback, though tailwinds from 2020/21 deferred capex are likely diminishing,” wrote Stantial. “Our 2024 estimates across the manufacturer group presume a ~MSD% pullback in the replacement cycle, which still feels reasonable based on supplier & customer tone throughout the show.”
Among other things, G2E is often the forum at which slot makers roll out new games for consideration by casino slot managers.
AGS, IGT Showed Well at G2E
Citing conversations with slot buyers at G2E, Stantial customers were broadly impressed by new offerings from the usual suspects, such as Aristocrat Leisure and Light & Wonder. Those companies, along with IGT, are the three-largest slot suppliers in North America.
PlayAGS was heralded by slot managers as among the most-improved firms in the category. There are tailwinds for gaming device manufacturers. Those include consumers remaining dedicated to casino visits, which provides operators with much-needed resiliency. Additionally, analysts believe supply chain pressures in the industry are easing.
Stantial said the stars could be aligning for slot machine stocks such as PlayAGS, which has room for growth, and IGT, which has stock-specific sparks.
“Putting it all together, forecasting NTM market share trends remains incredibly difficult with no clear share donor. As such, we tend to favor small suppliers with more material whitespace (AGS) or suppliers with idiosyncratic catalysts (IGT),” added the analyst.
M&A Could Spark Slot Machine Stocks
Consolidation in the slot machine sector could be poised to perk up in the months ahead. For now, many eyes are on IGT, which announced in June that it’s mulling strategic alternatives for its global gaming and PlayDigital units.
Likewise, Stantial said smaller rival Ainsworth proclaimed at G2E that it would be open to acquisitions and that it would be receptive to offers to be acquired. There was also chatter of iGaming and online sportsbook operators mulling deals to bring tech stacks in-house, and another familiar rumor popped up at the conference.
“Lastly, MGM management commentary on a panel indicated they feel the BetMGM JV structure may not be optimal long-term, which coupled with frustration from certain Entain shareholders, is likely to re-surface speculation regarding an MGM/Entain acquisition,” concluded Stantial.
Related News Articles
AGS Confirms Receipt of Takeover Offer, Ongoing Talks
AGS/Inspired Deal May Not Happen or Could Reach $13 a Share: Analyst
Aristocrat Leisure Could Pursue Prudent Acquisition Strategy
IGT Asset Sales Could Draw Interest from European Suitors
Most Popular
Bally’s Chicago at Risk of Not Being Built, Says City Alderman Brian Hopkins
Virginia’s Bristol Casino Shutters Due to Equipment Failure
Bally’s Insiders Benefit from A’s Move, Bought Stock in Advance of MLB Vote
Las Vegas Karaoke Bar Sued to Tune of $264M for Skirting Royalties
Most Commented
-
F1 to Remove Tunnel Population Living Beneath Las Vegas Strip
November 14, 2023 — 28 Comments— -
Court Voids Nassau Coliseum Lease Transfer for Sands New York Casino Plan
November 10, 2023 — 9 Comments— -
Edwin Castro is Rightful Winner of $2.08B Powerball, Lawyer Says Video Proves
November 16, 2023 — 9 Comments— -
VEGAS MYTHS RE-BUSTED: The Old MGM Grand Was Imploded After the Fire
November 17, 2023 — 8 Comments— -
Bed Bugs Found in Two More Las Vegas Hotels, Total Now Nine – Report
October 19, 2023 — 6 Comments—
No comments yet