Recently, Everi announced a groundbreaking transformative merger with International Game Technology (IGT). The strategic business combination, valued at approximately $6.2 billion, is expected to see Everi merge with IGT’s Global Gaming and PlayDigital businesses, creating a new dynamic global gaming and fintech company that is expected to revolutionize the sector.
Keeping in might the upcoming merger, Everi, trading on the NYSE under ticker EVRI, received a “neutral” rating from the leading middle market investment bank and financial advisory services provider, B Riley Securities. On Friday, B Riley’s analyst, David Bain, confirmed Everi’s price target of $12 per share and the “neutral” rating.
Addressing the aforementioned merger, the analyst said that it is likely to impact positively Everi’s stock. Bain explained that the merger could “work to rerate shares to a sustainable, much higher valuation level as it becomes better understood by investors,” as announced by CDC Gaming Reports.
Additionally, the analyst for B Riley outlined: “Generally, the most significant overlap between IGT and EVRI is the mechanical stepper category. Mechanical reels are by far the minority versus the video form factor. However, the stepper market has grown more competitive for EVRI over the past several quarters.”
The Analyst Highlighted Potential Concerns
He added that there are some near-to-medium-term concerns for the company, explaining that he is worried about Everi’s plan for a reversal of key performance indicators that may surpass the initially set deadline which is June. What’s more, Bain pointed out that “investor skepticism” may be fueled by the company’s plans for new-game sales “even if it is not the actual case.”
B Riley’s analyst said that the “neutral” rating for Everi doesn’t suggest that it may become negative. According to Bain, the current stock price holds significant value and there are compelling arguments that its shares may trade even higher. As of Friday, Everi’s stock was trading around $9.28 per share.
“To be clear, our neutral rating does not suggest we are close to being negative on EVRI. We believe there is strong value at the current stock price and a solid argument for shares to go higher.“
David Bain, analyst for B Riley Securities
In mid-March, Everi announced it agreed to supply anti-money laundering (AML) technology for Great Canadian Entertainment. As a result, the company’s cutting-edge tech supercharged the casino operator’s Casino New Brunswick and Casino Nova Scotia.