Scientific Games (SGMS) PT Raised to $86 at Stifel

June 29, 2021 5:47 PM EDT
Get Alerts SGMS Hot Sheet
Price: $58.07 --0%

Rating Summary:
    8 Buy, 7 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 10 | Down: 13 | New: 20
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Stifel analyst Jeffrey Stantial raised the price target on Scientific Games (NASDAQ: SGMS) to $86.00 (from $66.00) while maintaining a Buy rating.

The analyst commented, "This morning, SGMS announced the long-awaited outcome of their strategic review. Management plans to divest their lottery and sports betting businesses, and utilize proceeds to delever and invest in growth opportunities. We are positive on the announcement, as we have long felt that SGMS's lottery operations were garnering an unwarranted conglomerate discount. Meanwhile, with B2B sports betting platform providers looking like an increasingly competitive space (as operators take technology in-house), we think focusing on iGaming content will likely provide higher returns on capital for SGMS over time. While valuation is certainly not undemanding, and the outcome of the review is likely partially priced in, we remain constructive nonetheless as we see a more compelling PF outlook for SGMS with a manageable balance sheet (est. <4x), strong gaming turnaround story, and solid competitive positioning for the ongoing secular shift to omnichannel gaming. Reiterate Buy. TP goes to $86 on our SOTP."

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