Brean Murray Carret Lowers Price Target on Scientific Games (SGMS), Margins on The Rise

Brean Murray Carret & Co. is reaffirming its Buy rating on shares of Scientific Games (NASDAQ: SGMS) and is lowering its price target slightly by $1 to $12.

The company reported its second quarter results with EPS of $0.08, which was $0.03 ahead of the firm's estimate and $0.04 ahead of the Street. Operating EBITDA was $78 million, topping the firm's estimate by $68 million.

Service revenue for the quarter rose 11 percent to $213 million while instant ticket revenue rose 10 percent. Service margins increased 370 bps to 46.5 percent and was above the firm's prediction.

Brean Murray Carret recommends that investors take advantage of shares being at this level. Shares are down roughly 18 percent year to date, but are trading up $0.14 or 1.68 percent to $8.16 today.

The firm is reducing its 2011 EPS estimate by $0.02 to $0.24 due to higher corporate expenses. Brean Murray Carret is maintaining its 2012 estimate of $0.45.

For more ratings news on Scientific Games click here and for the rating history of Scientific Games click here.

Shares of Scientific Games closed at $8.03 yesterday.

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