Published Wednesday, March 25, 2009 | 12:12 a.m.
Updated Wednesday, March 25, 2009 | 8:28 a.m.
International Game Technology President and Chief Executive TJ Matthews' resignation from those two posts will likely be followed by his departure as chairman at some point in the future, a JPMorgan analyst said Wednesday.
Late Tuesday the Reno, Nev.-based maker of slot machines and casino management systems said Matthews had stepped down as president and CEO and would be succeeded by board member Patti S. Hart.
Hart, former chairman and CEO of Pinnacle Systems, will take over the positions at the beginning of April.
IGT's stock gained 35 cents, or 3.6 percent, to $10.12 in Wednesday morning trading. Over the past year, the stock has traded in a range of $6.81 to $46.93.
JPMorgan's Joseph Greff said Matthews' departure was not shocking given his contract expires later this year, but questioned how long the executive would stay on as chairman.
"We suspect that after some period of time and transition that TJ would step down as chairman," the analyst wrote in a client note.
Greff reaffirmed a "Neutral" rating.
Unlike Greff, Goldman Sachs' Steven Kent said investors would be surprised by Matthews' exit taking place toward the end of the quarter, which may indicate softer-than-expected results. He was also wary of how Hart would be received, given that investors and the gaming sector know little about her.
"The potential for Ms. Hart to come in and 'reset the bar' on earnings and project development is one of our fears and -- again, with little information -- we suspect investors will expect the worst," he said.
Kent also kept a "Neutral" rating and reaffirmed a $9.50 price target.
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