Goldman Sachs Suggests Buying Put Spreads on International Game Technology

Goldman Sachs is out with a research report this morning, where is suggests that traders buy puts on International Game Technology IGT ahead of legislative catalysts and weak near-term trends. Goldman Sachs Gaming & Lodging analyst, Steve Kent, sees 13% downside to his 12-mth price target of $14 on Sell rated IGT, as he expects replacement rates to come under pressure on slots due to increased competition. The analysts noted that options are very attractive on IGT, with 3-mth implied vol of 29% is trading in the lowest 10%-ile, and 4 points below realized, despite two potentially stock moving legislative catalysts that could come before September expiration: VLT legislation and gaming expansion legislation in Illinois. Goldman recommends buying the July $16/14 put spread for $0.85. International Game Technology is a global gaming company specializing in the design, manufacture, and marketing of electronic gaming equipment and systems.