Stifel Expert: M&A Activity May Rekindle Slot Machine Stock

Jeffrey Stantial, an expert from the American multinational independent investment bank and financial services company Stifel commented on the state of slot manufacturers stock. As reported by casino.org, he noted that the sector’s stock isn’t in great shape but M&A activity could potentially change that.

Most slot managers Stantial contacted cited stable NTM purchasing intentions, barring a material pullback. However, the expert also noted that deferred capex from the pandemic period is likely diminishing.

Stantial added that his team presumes an ~MSD% pullback in the replacement cycle in 2024. He added that this still feels reasonable based on the supplier and customer tone throughout G2E.

IGT and PlayAGS are Stantial’s Stocks of Choice

During the recent industry convention, several manufacturers presented impressive products that caught Stantial’s attention. He cited International Game Technology, Aristocrat Leisure and Light & Wonder as consistent performers, which is to be expected from the three largest suppliers in North America.

Speaking about his personal preference, Stantial said that his preferred slot manufacturer stock ideas include IGT, as well as the emerging brand PlayAGS. Many, including the Stifel expert, agreed that PlayAGS is one of the most-improved firms in the slot manufacturing sector. According to Stantial, PlayAGS has a lot of potential because of its room for growth.

IGT, on the other hand, has stock-specific sparks, which are also promising, the expert added.

Stantial added that it is difficult to forecast how the NTM market will develop and said that there is “no clear share donor.” Because of that, his team prefers to favor promising smaller suppliers such as PlayAGS or companies with “idiosyncratic catalysts” such as IGT.

Stantial concluded that while the market remains suboptimal, M&A activities could potentially lead to stock spikes. He cited certain companies’ merger intentions as a point of interest, saying that such deals can cause the slot manufacturer stock market to perk up.

Stantial also commented on the recent hints that MGM Resorts and Entain’s partnership may not last in the long term. The two companies, which jointly operate the famous BetMGM brand, have certain disagreements that may potentially lead to a new MGM/Entain takeover attempt. According to Stantial, such a move could have a beneficial effect on slot manufacturers stock.