Please ensure Javascript is enabled for purposes of website accessibility

Why Scientific Games Shares Jumped 14.7% on Tuesday

By Travis Hoium – Sep 15, 2020 at 3:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Analysts chimed in after Scientific Games' pop yesterday.

What happened 

Shares of Scientific Games (LNW -1.76%) had another great day on Tuesday, climbing as much as 15.5% in trading before closing up 14.7% for the day. This follows a 39.3% gain in shares on Monday

So what

Yesterday's move was the result of a new investor group, led by Caledonia, taking a large stake in the company, and today analysts weighed in. Union Gaming kept a buy rating on the stock and raised its price target from $27 to $38 per share. Jefferies and Stifel also had positive comments about investment. 

Slot machines on a casino floor

Image source: Getty Images.

Union Gaming thinks changes to the board of directors and the investor base give the company a better ability to execute on its long-term strategy. Caledonia's track record of creating value in the gambling space is also giving the analysts confidence. 

Now what

While yesterday's news was a more fundamental shift in the investment thesis, today's isn't as notable in the long term. Analyst upgrades and downgrades can move stocks in the short term, but typically don't last long term. What investors should look out for is if Caledonia's investment can lead to changes in Scientific Games' performance in areas like mobile and digital gaming. If it can, this will be a home run stock, but if it doesn't, the company's recent pop won't last long. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Jefferies Financial Group Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Light & Wonder, Inc. Stock Quote
Light & Wonder, Inc.
$41.23 (-1.76%) $0.74
Jefferies Financial Group Inc. Stock Quote
Jefferies Financial Group Inc.
$29.98 (-3.26%) $-1.01
Stifel Financial Corp. Stock Quote
Stifel Financial Corp.
$54.43 (-3.90%) $-2.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.