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Investing.com — Scientific Games (NASDAQ:SGMS) rose 3.5% after getting a boost and Street-high price target from Jefferies (NYSE:JEF).
The stock was bumped to buy from hold, and its price target raised to $50 from $20 by analyst David Katz after changes in ownership, governance and leadership “warrant evaluation based on prospects for value creation not seen in 20 years.”
“Our upside value opportunity of 100%+ exists despite the shares’ ~76% rise this past week and despite the fundamental pandemic pressures on operator capex,” Katz wrote. “We consider the asset sales/deconsolidation optionality and overall business execution opportunities under new leadership still imply 47% upside.”
Last week, the company said Caledonia, a gaming industry investor, would buy a 34.9% stake from MacAndrews & Forbes at $28 a share. Scientific Games shares traded around $33.28 on Monday.
In connection with the transaction, Scientific Games is implementing a series of governance changes and enhancements, including refreshment of its board of directors and termination of the stockholders agreement with MacAndrews & Forbes, to reflect its new investor base, the company said in a statement.
Earlier this year, the company hired a new chief financial officer and a new chief of human resources.
The average price target for Scientific Games is $28.80. Shares have three buy ratings, one hold and one sell.
The stock is up the most in about two years.
