Gaming equipment concern International Game Technology (
) is scheduled to release its quarterly earnings report after the
close of trading tonight, with analysts looking for a profit of 19
cents per share. Comparatively, IGT earned 20 cents per share in
the same period last year. Historically, the firm has matched the
consensus estimate twice and bested expectations twice in the prior
four reporting periods, resulting in an average upside surprise of
Sentiment is relatively bullish heading into the company's
quarterly report. On the options front, speculative investors are
rather optimistic. Specifically, the stock's Schaeffer's put/call
open interest ratio (SOIR) of 0.91 ranks in the 26th percentile of
its annual range. This ratio has also trended lower during the past
couple of sessions, dipping from its Oct. 30 perch at 0.93, in the
Data from the International Securities Exchange (ISE) and
Chicago Board Options Exchange (
), however, hints at a rising preference for puts heading into
IGT's quarterly report. The stock's 10-day ISE/CBOE put/call volume
ratio of 3.05 reveals that puts bought to open have tripled calls
purchased during the prior two weeks. This ratio also ranks above
80% of all those taken in the past year. Rising negativity ahead of
an event typically signals low investor expectations.
Additional bearish sentiment can be found in the stock's short
interest backdrop. Currently, nearly 5% of IGT's float is sold
short, despite a decline of 7.6% during the past month. With short
interest declining, a continuation of this short-covering trend
could provide lift for the security.
Turning our attention toward the analyst community, we find that
Wall Street is firmly entrenched in the bullish camp. According to
, IGT has garnered 13 "buys," seven "holds," and only one "sell"
rating. What's more,
reports that the average 12-month price target for IGT rests at
$19.43 per share, a premium of 19% to the stock's close at $16.35
per share on Monday.
Technically speaking, IGT has fallen more than 20% during the
past 52 weeks. What's more, while the shares have rallied steadily
along their 10-day moving average since late October, their 200-day
trendline rests firmly overhead in the $17 region. This area also
marks IGT's July peak, and could pose a significant technical
In conclusion, the stock's current technical and sentiment
backdrops do not offer up a best-case scenario for IGT bulls. While
there is the potential for short covering, or even an unwinding of
pessimism among options traders, IGT faces stiff overhead technical
resistance, as well as the potential for analyst downgrades or
price-target cuts. The bottom line is that unless the company beats
expectations for the current quarter and guides higher, IGT may be
left to trade sideways for the time being.
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