(By Balachander) International Game Technology (NYSE: IGT) shares were upgraded to "Buy" from "Hold" and price target raised to $19 from $16 by Deutsche Bank (DB) after recent management meetings and a refreshed view of IGT specific operating trends.
The bank believes the worst of the IGT specific operating trends are behind them, or at the very least well understood.
"We find the free cash flow generation, which we anticipate will accrue to shareholders, and beatable Consensus forecasts with growth through F2014, appealing at current levels," DB wrote in a note.
"Simply put, we see little downside risk in the least expensive, most liquid, equipment supplier, in an environment where replacement demand isn't shrinking and numbers are beatable and likely going higher," the bank said.
DB thinks IGT will screen exceptionally well on a slew of metrics into year-end as investors position for calendar 2013.
Risks include aggressive competitor discounting further macro pressure on casino operators and an inability to execute on the social gaming strategy, the bank said.
The stock, which has been trading in the 52-week range of $10.92 to $18.10, gained 2.81 percent to trade at $14.26 on Monday.