Scientific Games scores as results show path to reducing leverage

SciPlay

08/05/2019 16:42

** Shares of Scientific Games Corp  SGMS.O  jump 19.1% on Weds
after gaming co reported qtrly results after the bell on Tues
    ** SGMS on track for biggest one-day pct gain since Nov 8
    ** Though Q1 adj loss/sh of $0.26 bigger than avg analyst
estimate of $0.04 loss/sh, adj EBITDA of $328 mln surpassed est
of $323.4 mln. Rev of $837 mln also ahead of $832.3 mln estimate
(IBES data from Refinitiv)  urn:newsml:reuters.com:*:nASB01KLM
    ** SunTrust Robinson Humphrey, which rates SGMS "buy,"
points to recent IPO of SciPlay Corp  SCPL.O   urn:newsml:reuters.com:*:nL1N21N0SV,
SGMS's social gaming business, and improving free cash flow,
at$96 mln for Q1, as promising for deleveraging
    ** "As a result of the SciPlay IPO, we expect to continue
our deleveraging path," said SGMS in press release announcing
results  urn:newsml:reuters.com:*:nPn9Qyjxha
    ** With SCPL IPO, SunTrust also sees "meaningful valuation
arbitrage" given SCPL and SGMS have similar market cap.
According to SunTrust estimates, SCPL trading at ~15x 2019 adj
EBITDA while SGMS trading at just ~7x 2019 adj EBITDA
    ** YTD SGMS up 25.5% vs 15.4% gain for S&P 400 Consumer
Discretionary index  .SPMDCD 

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