Why the global action in gaming tech has jumped 13% today

What happened

Game industry supplier actions International Game Technology (NYSE: IGT) jumped as high as 13% in trading Thursday after getting a major upgrade from an analyst. Shares slipped late in the session and were up 5.6% at 3:30 p.m. EDT.

So what

Analyst Benjamin Chaiken at Credit Suisse Group increased its price target for IGT’s share from $ 35 per share to $ 36 per share. It might be a small move, but it represents an implied rise of over 50% depending on where the stocks are currently trading.

Image source: Getty Images.

The stock quote was maintained at a level of outperformance, so only the price target itself changed. Gaming stocks, in general, are expected to perform well in the second half of the year, given record gaming levels in Nevada and a strong recovery for casinos emerging from the pandemic.

Now what

I wouldn’t give too much weight to an analyst rating or a change in price target because it doesn’t fundamentally change a company’s performance. In the case of today’s upgrade, the price target hasn’t even moved much.

What is more important in the long term is the trajectory of the company. IGT has long been a key supplier to the gaming industry, and now their challenge is to build a business to serve the growing online gaming business. If she can do it, it could be worth growing for years to come. But I think we have to see how the second half of 2021 results come in before we get too excited about this game stock.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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