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Slot maker downgraded

Wednesday, April 2, 2003 | 11:16 a.m.

International Game Technology has been downgraded to "neutral" from "buy" by UBS Warburg casino analyst Robin Farley on concerns that the stock has performed well and moved close enough to its price target.

"We still see upside of more than 10 percent from current levels and further upside of $2 to our price target if Maryland were to legalize slots," Farley wrote Tuesday. "We continue to believe the company is well positioned to maintain its market share, benefit from expanding jurisdictions and buy back its shares."

"If state politics disappoints IGT, we think that may open an opportunity to buy shares at a cheaper price than current levels," she said.

IGT -- the world's largest slot maker -- has been successful in convincing casinos to swap out older slot machines for "cashless" devices that dispense paper tickets in addition to coins, analysts say. It is also leasing more participation slot games to casinos that offer big jackpots maintained by IGT and popular with players, they say. Still, expansion opportunities into other states may be more limited than originally envisioned as governments wrestle with legalization issues.

IGT stock traded up nearly 2 percent before noon today, at $81.86.

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