Scientific Games (SGMS) PT Raised to $90 at Truist Securities Citing Strategic Review, the Sale of its Betting Business

Truist Securities analyst Barry Jonas raised the price target on Scientific Games (NASDAQ: SGMS) to $90.00 (from $68.00) while maintaining a Buy rating, citing strategic review, the sale of its betting business.

The analyst notes: "SGMS announced results of its strategic review, with plans to sell its Lottery and Sports Betting businesses. Assuming $6-7B of proceeds, we think leverage could move from the high-end of peers 3-5x range by 2022E to meaningfully below the low-end. That sets SGMS up nicely for M&A, likely necessary to achieve management’s goals for Digital being comparable to Gaming in three years. This could imply the remaining SGMS generating as much as ~$2B of AEBITDA in a Bull Case scenario. Reiterate Buy and increase our PT to$90 from $68, supported by our SOTP analysis."

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