What happened
Shares of gambling industry supplier International Game Technology (IGT 0.10%) jumped as much as 13% in trading on Thursday after getting a big upgrade from an analyst. Shares have slipped late in trading and are up 5.6% at 3:30 p.m. EDT.
So what
Analyst Benjamin Chaiken at Credit Suisse Group upped their price target for IGT stock from $35 per share to $36 per share. That may be a small move, but it represents an implied upside of over 50% based on where shares are currently trading.
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The rating for the stock was held at an outperform level, so only the price target itself changed. Gambling stocks, in general, should perform well in the second half of the year, given record gambling levels in Nevada and a strong recovery for casinos coming out of the pandemic.
Now what
I wouldn't put too much weight in an analyst rating or price target change because it doesn't fundamentally change how a company is performing. In the case of today's upgrade, the price target didn't even move much.
What's more important long term is the trajectory of the business. IGT has been a key supplier to the gambling industry for a long time, and now its challenge is building a business in serving the growing online gambling business. If it can do that, this could be a growth stock for years to come. But I think we need to see how the second half of 2021 results come in before getting too excited about this gambling stock.
