Bitaite do dia 11-11-2005: IGT
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O 1º alvo foi atingido e ultrapassado.
Desculpa GAB mas só agora reparei nesta questão tua.
Não te consigo adiantar muito sobre o sector pois é um sector bastante específico. Embora caracterizado por elevadas rentabilidades depende muito de legislações estatais para expandir. Tem-se falado num movimento de concentração no sector e na expansão para um mercado bastante apetecível: Macau.
Um abraço
Como analisa o passado e presente deste ramo de actividade ou se desejar o jogo ( no todo )?
Desculpa GAB mas só agora reparei nesta questão tua.
Não te consigo adiantar muito sobre o sector pois é um sector bastante específico. Embora caracterizado por elevadas rentabilidades depende muito de legislações estatais para expandir. Tem-se falado num movimento de concentração no sector e na expansão para um mercado bastante apetecível: Macau.
Um abraço
- Anexos
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IGT - INTL GAME TECH (NYSE)
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- Mensagens: 3876
- Registado: 18/11/2004 16:43
by Sanjay Ayer
Analyst Note 11-10-2005
International Game Technology IGT capped off a difficult fiscal year Thursday with fourth-quarter results that were roughly in line with our expectations. Our fair value estimate remains $38 per share.
Revenue in the quarter declined 2% from the prior year, with strong international shipments helping to offset continued weakness in domestic sales. North American shipments tumbled 50%, as anemic replacement demand and a dearth of new gaming jurisdictions again handcuffed performance, as expected. The domestic slot market will remain challenging in the near term, with no meaningful jurisdictional expansion or pickup in replacement demand expected until 2007. International shipments, meanwhile, exceeded our expectations thanks to very robust demand in Japan and Australia. For the full year, domestic shipments fell 45%, while international shipments grew 37%.
Management reiterated its earnings guidance of $1.20 per share for fiscal 2006, excluding the impact of option expensing, which would be flat with this past year's results. We think this figure is fairly conservative in light of the potential upside we see from international growth and new product rollouts. More importantly, we continue to believe that IGT has excellent long-term prospects. Investors willing to look beyond the near-term sluggishness will, in our view, find that the market's shortsightedness has created a compelling buying opportunity.
Thesis 08-11-2005
International Game Technology is the premier player in the highly profitable slot machine industry.
Dominant market share and unmatched research and development firepower set IGT apart from the competition. Roughly 7 out of 10 slot machines in North America are manufactured by IGT. The company has carved out this stronghold largely through innovation. Its commitment to research and marketing has resulted in a strong portfolio of patents and premium titles, including Wheel of Fortune and Triple Play Poker. Spending more than twice on R&D than any of its rivals do, IGT should maintain its status as the industry's pacesetter in innovation, in our view.
It helps that IGT operates in an industry with very attractive economics. New entrants are thwarted by the stringent regulatory testing of all new slot machines, rigorous licensing requirements in each gaming jurisdiction, and intellectual property that's concentrated in the hands of a few firms. Also, customers aren't very price-sensitive, as a typical slot machine pays for itself within a few months. IGT's knack for churning out blockbuster products and its sterling reputation in the industry, which bases its slot-placement decisions almost entirely on trust and performance rather than price, are invaluable.
After a decade of stellar growth--driven by an explosion in gaming markets and blistering replacement demand--IGT's growth has slowed dramatically. The major culprits are a lull in new gaming jurisdictions and anemic replacement demand. We think the firm's recent troubles are an issue of timing rather than any structural plight, however. The rapid adoption in recent years of IGT's new cashless machines accelerated the normal slot replacement cycle and pulled demand forward, in our view. As such, the company has been plagued by a vacuum in replacement demand that will probably last at least through 2006. We believe a more normalized replacement cycle will resume over time, however. Also, we contend that the slump in gaming expansion is temporary. We expect more jurisdictions--both domestic and abroad--to adopt gaming as a means to raise revenue and prevent tax dollars from walking across state and country borders.
Finally, while IGT's product sales can be very lumpy, its leased-machine business can help mitigate these cycles. Half of IGT's total revenue comes from proprietary gaming systems that the firm leases to customers in exchange for a piece of the action, typically 20% of the net win or 3%-4% of gross wagers. This recurring revenue, combined with robust pricing power and product development, allows IGT to generate stellar returns on capital and free cash flow.
Valuation
Our fair value estimate remains $38 per share. Our annual sales growth assumption for IGT through 2010 is about 8%, which factors in market-share inroads made by rivals like WMS and Aristocrat. We assume long-term operating margins of about 33%, up from the 29% we project for 2005, driven primarily by pricing power and scale economies. We anticipate that the current sluggishness in demand will persist through 2006, but we expect 2007 to be a banner year for IGT, with the introduction of slots in Pennsylvania and strong placements in international markets like Macau. Growth and margins can fluctuate dramatically because of IGT's geographic sales mix, though. Machine sales to Japan, for instance, carry much lower gross margins than domestic sales. This can create margin pressure, but since the Japanese market also offers a very short replacement cycle, top-line growth can be boosted substantially.
Risk
If IGT's main competitors can concurrently perform well--which hasn't happened in recent history--the firm could lose meaningful market share. Also, higher gaming taxes could force casinos to spend less on slots.
See Previous Analyst Reports
Close Competitors TTM Sales $Mil Market Cap $Mil
International Game Tech 2,393 9,499
* Alliance Gaming 519 603
* WMS Industries 388 743
Shuffle Master 106 943
* GTech Holdings 1,290 3,989
* Morningstar Analyst Report Available | Compare These Stocks
Data as of 06-30-2004
Strategy
IGT's market dominance and emphasis on innovation are changing the game machine industry. While the firm once relied on gaming expansion to create demand, its focus on developing new games and operating technologies has reduced dependence on new casino development and shortened the product life cycle. Highly profitable progressive slot operations also help IGT achieve more consistent results.
Management & Stewardship
IGT has a strong management team and generally solid corporate governance. Thomas Matthews, formerly CEO of Anchor Gaming, replaced Tom Baker as CEO in late 2003. Matthews also recently assumed the chairman role after Baker resigned from the post. Executives are paid well. Matthews received $2.3 million in salary and bonus in 2004, plus 600,000 options. Of his bonus, 70% is tied to operating income growth; we generally prefer incentives tied to profitability metrics (like returns on capital) rather than growth. Executive officers and directors collectively own 1.5% of outstanding shares.
Profile
International Game Technology is the world's largest manufacturer of casino gaming machines and related systems. Half of its revenue comes from selling slots outright--IGT makes about 70% of the casino games operating in North America. The other half comes from proprietary gaming systems, like progressive jackpots. Recent innovations include games based on TV shows and cashless ticketing systems. IGT is licensed to operate in every significant gaming jurisdiction worldwide.
Growth
New installations will take center stage as the cashless replacement cycle rapidly winds down. The recent approval of slots in Pennsylvania could add 60,000 slots to the domestic installed base, while expanded gaming in California and Florida could also drive growth.
Profitability
Leading market share and strong titles give IGT pricing power, and new cashless machines carry higher margins than earlier models. We think operating margins can expand into the low to mid-30s, thanks to economies of scale and a favorable product mix.
Financial Health
IGT is in fine financial shape. The company has a healthy net cash position, and operating income covers interest expense many times. IGT actually benefits from rising interest rates, which lower the cost of funding progressive jackpots.
Analyst Note 11-10-2005
International Game Technology IGT capped off a difficult fiscal year Thursday with fourth-quarter results that were roughly in line with our expectations. Our fair value estimate remains $38 per share.
Revenue in the quarter declined 2% from the prior year, with strong international shipments helping to offset continued weakness in domestic sales. North American shipments tumbled 50%, as anemic replacement demand and a dearth of new gaming jurisdictions again handcuffed performance, as expected. The domestic slot market will remain challenging in the near term, with no meaningful jurisdictional expansion or pickup in replacement demand expected until 2007. International shipments, meanwhile, exceeded our expectations thanks to very robust demand in Japan and Australia. For the full year, domestic shipments fell 45%, while international shipments grew 37%.
Management reiterated its earnings guidance of $1.20 per share for fiscal 2006, excluding the impact of option expensing, which would be flat with this past year's results. We think this figure is fairly conservative in light of the potential upside we see from international growth and new product rollouts. More importantly, we continue to believe that IGT has excellent long-term prospects. Investors willing to look beyond the near-term sluggishness will, in our view, find that the market's shortsightedness has created a compelling buying opportunity.
Thesis 08-11-2005
International Game Technology is the premier player in the highly profitable slot machine industry.
Dominant market share and unmatched research and development firepower set IGT apart from the competition. Roughly 7 out of 10 slot machines in North America are manufactured by IGT. The company has carved out this stronghold largely through innovation. Its commitment to research and marketing has resulted in a strong portfolio of patents and premium titles, including Wheel of Fortune and Triple Play Poker. Spending more than twice on R&D than any of its rivals do, IGT should maintain its status as the industry's pacesetter in innovation, in our view.
It helps that IGT operates in an industry with very attractive economics. New entrants are thwarted by the stringent regulatory testing of all new slot machines, rigorous licensing requirements in each gaming jurisdiction, and intellectual property that's concentrated in the hands of a few firms. Also, customers aren't very price-sensitive, as a typical slot machine pays for itself within a few months. IGT's knack for churning out blockbuster products and its sterling reputation in the industry, which bases its slot-placement decisions almost entirely on trust and performance rather than price, are invaluable.
After a decade of stellar growth--driven by an explosion in gaming markets and blistering replacement demand--IGT's growth has slowed dramatically. The major culprits are a lull in new gaming jurisdictions and anemic replacement demand. We think the firm's recent troubles are an issue of timing rather than any structural plight, however. The rapid adoption in recent years of IGT's new cashless machines accelerated the normal slot replacement cycle and pulled demand forward, in our view. As such, the company has been plagued by a vacuum in replacement demand that will probably last at least through 2006. We believe a more normalized replacement cycle will resume over time, however. Also, we contend that the slump in gaming expansion is temporary. We expect more jurisdictions--both domestic and abroad--to adopt gaming as a means to raise revenue and prevent tax dollars from walking across state and country borders.
Finally, while IGT's product sales can be very lumpy, its leased-machine business can help mitigate these cycles. Half of IGT's total revenue comes from proprietary gaming systems that the firm leases to customers in exchange for a piece of the action, typically 20% of the net win or 3%-4% of gross wagers. This recurring revenue, combined with robust pricing power and product development, allows IGT to generate stellar returns on capital and free cash flow.
Valuation
Our fair value estimate remains $38 per share. Our annual sales growth assumption for IGT through 2010 is about 8%, which factors in market-share inroads made by rivals like WMS and Aristocrat. We assume long-term operating margins of about 33%, up from the 29% we project for 2005, driven primarily by pricing power and scale economies. We anticipate that the current sluggishness in demand will persist through 2006, but we expect 2007 to be a banner year for IGT, with the introduction of slots in Pennsylvania and strong placements in international markets like Macau. Growth and margins can fluctuate dramatically because of IGT's geographic sales mix, though. Machine sales to Japan, for instance, carry much lower gross margins than domestic sales. This can create margin pressure, but since the Japanese market also offers a very short replacement cycle, top-line growth can be boosted substantially.
Risk
If IGT's main competitors can concurrently perform well--which hasn't happened in recent history--the firm could lose meaningful market share. Also, higher gaming taxes could force casinos to spend less on slots.
See Previous Analyst Reports
Close Competitors TTM Sales $Mil Market Cap $Mil
International Game Tech 2,393 9,499
* Alliance Gaming 519 603
* WMS Industries 388 743
Shuffle Master 106 943
* GTech Holdings 1,290 3,989
* Morningstar Analyst Report Available | Compare These Stocks
Data as of 06-30-2004
Strategy
IGT's market dominance and emphasis on innovation are changing the game machine industry. While the firm once relied on gaming expansion to create demand, its focus on developing new games and operating technologies has reduced dependence on new casino development and shortened the product life cycle. Highly profitable progressive slot operations also help IGT achieve more consistent results.
Management & Stewardship
IGT has a strong management team and generally solid corporate governance. Thomas Matthews, formerly CEO of Anchor Gaming, replaced Tom Baker as CEO in late 2003. Matthews also recently assumed the chairman role after Baker resigned from the post. Executives are paid well. Matthews received $2.3 million in salary and bonus in 2004, plus 600,000 options. Of his bonus, 70% is tied to operating income growth; we generally prefer incentives tied to profitability metrics (like returns on capital) rather than growth. Executive officers and directors collectively own 1.5% of outstanding shares.
Profile
International Game Technology is the world's largest manufacturer of casino gaming machines and related systems. Half of its revenue comes from selling slots outright--IGT makes about 70% of the casino games operating in North America. The other half comes from proprietary gaming systems, like progressive jackpots. Recent innovations include games based on TV shows and cashless ticketing systems. IGT is licensed to operate in every significant gaming jurisdiction worldwide.
Growth
New installations will take center stage as the cashless replacement cycle rapidly winds down. The recent approval of slots in Pennsylvania could add 60,000 slots to the domestic installed base, while expanded gaming in California and Florida could also drive growth.
Profitability
Leading market share and strong titles give IGT pricing power, and new cashless machines carry higher margins than earlier models. We think operating margins can expand into the low to mid-30s, thanks to economies of scale and a favorable product mix.
Financial Health
IGT is in fine financial shape. The company has a healthy net cash position, and operating income covers interest expense many times. IGT actually benefits from rising interest rates, which lower the cost of funding progressive jackpots.
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- Mensagens: 525
- Registado: 8/5/2004 16:38
- Localização: 16
-
- Mensagens: 525
- Registado: 8/5/2004 16:38
- Localização: 16
Bitaite do dia 11-11-2005: IGT
A quebrar LT desc que vem desde Junho de 2004.
Apresentou ontem resultados record.
1º Alvo: 30
Apresentou ontem resultados record.
1º Alvo: 30
- Anexos
-
- igt.png (16.33 KiB) Visualizado 778 vezes
-
- Mensagens: 525
- Registado: 8/5/2004 16:38
- Localização: 16
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