Scientific Games (SGMS) PT Lowered to $88 at Stifel

Stifel analyst Jeffrey Stantial lowered the price target on Scientific Games (NASDAQ: SGMS) to $88.00 (from $90.00) while maintaining a Hold rating.

The analyst commented, "SGMS posted AEBITDA from continuing ops (ex-lottery and sports betting) inline to our model (Consensus was non-comp). Gaming was ahead, driven by growth in N.A. installs and sequential improvement in international yields, offset by online coming in modestly behind. Results in Gaming were encouraging, with SGMS seemingly taking ship share in both North America and Australia, while continuing recent momentum in premium installs. We remain positive on the long-term trajectory of the land-based business, and SGMS's capital efficient omnichannel gaming content-led strategy. However, with the stock trading ~11x 2022E AEBITDA, we believe valuation factors a meaningful degree of success already, with further upside likely hinging more on sustained market share growth driving upside to Consensus. Hence, we reiterate Hold for now. We adjust our model compositionally and to factor ramping iGaming investment, with 2022/2023E AEBITDA -2%/-1% to our prior model. Target price goes to $88 from $90 on estimate revisions."

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