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.
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.
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.