Summarizing The Case For International Game Technology PLC (IGT), Baker Hughes Company (BKR)

International Game Technology PLC (NYSE: IGT) shares are -25.45% down in the year-to-date (YTD) period and have moved 4.40% or $0.47 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +210.86% lower. Comparatively, the stock is -28.25% down YTD and 29.77% over the trailing 3-month period. If we look at the shorter duration, its week performance is 9.41% and 11.38% over the month.

Analyst Recommendations

On May 21, 2020, Credit Suisse recommended the IGT stock is a Underperform, while earlier, Susquehanna had Downgrade the stock as a Neutral on August 07, 2020. 10 analysts offering the recommendations for the stock have a consensus rating of 2.60 to suggest that the IGT stock is a “Moderate Buy. 1 of the 10 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $11.16 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $9.63. The forecasts give the International Game Technology PLC stock a price target range of $15.00 on the higher side while at least one analyst think the stock could plunge to a low of $5.00. The two limits represent an upside potential of 25.6% or -123.2%.

Earnings Forecast

Analysts estimate the earnings to increase 15.70% in the current quarter to -$0.22, down from the $0.21 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.65, down -28.70% from $1.08 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.11 and $0.13. Wall Street estimates earnings per share to be at an average of $0.71 for the next year.

Baker Hughes Company (NYSE:BKR), on the other hand, is trading around $15.05 with a market cap of $15.84B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $20.68 and spell out a more modest performance – a 27.22% return. Some analysts are even forecasting -$0.42 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Baker Hughes Company (BKR) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

BKR’s operating margin was negative on the trailing 12 months basis, remaining steady at -69.20%, while the operating expenses over the recent quarter were at $730.0 million. This represented a 84.59% of the company’s total revenues which amounted $4.74 billion. With this in place, we can see that the company’s diluted EPS declined -$0.31 on the year-over-year period, shrinking to -$0.02 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $37.52 billion from $37.23 billion over the previous quarter. The cash flow from operating activities totaled $708.0 million, significantly higher than the $409.0 million reported in the year-ago quarter. The company’s free cash flow for the quarter was $106.0 million.

Insider activity

Insiders have transacted a total of 19 times at Baker Hughes Company over the last 6 months, with insider purchases undertaken 11 times and accounting for 28,179,476 shares. Insider sales totaled 28,053,094 shares over the same period, with these deals completed in 8 transactions. Looking at these numbers, we realize that net purchases over that period are 3.0 shares. Insiders now hold a total of 1.31M shares after the latest sales, with -104.90% net shares purchased.

Major holders

Insiders own 0.10% of the company shares, while shares held by institutions stand at 96.60% with a share float percentage of 654.94M. Investors are also buoyed by the number of investors in a company, with Baker Hughes Company having a total of 753 institutions that hold shares in the company. The top two institutional holders are General Electric Company with over 377.43 million shares worth more than $5.81 billion. As of Jun 29, 2020, General Electric Company held 57.51% of shares outstanding.

The other major institutional holder is Dodge & Cox Inc, with the investment firm holding over 90.32 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $1.39 billion and represent 13.76% of shares outstanding.