{"id":170229,"date":"2021-04-12T08:09:23","date_gmt":"2021-04-12T15:09:23","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=170229"},"modified":"2021-04-12T10:04:58","modified_gmt":"2021-04-12T17:04:58","slug":"scientific-games-credit-outlook-improving-rating-still-junk","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/","title":{"rendered":"Scientific Games Ratings Outlook Lifted as Moody’s Sees Strong COVID-19 Rebound"},"content":{"rendered":"

Gaming equipment manufacturer Scientific Games (NASDAQ:SGMS) saw its credit rating outlook boosted to \u201cstable\u201d from \u201cnegative\u201d by Moody’s Investors Service. The research firm points to a strong post-coronavirus recovery for the slots maker.<\/p>\n

\"Scientific
Scientific Games slot machines. Moody’s raised its outlook on the company’s credit grade. (Image: Las Vegas Review-Journal<\/em>)<\/figcaption><\/figure>\n

Las Vegas-based Scientific Games still carries a B3 credit rating — well into junk territory. The stock gained 10.63 percent last week and is up more than five-fold over the past year.<\/p>\n

The change in outlook to stable from negative reflects the recovery in the company’s gaming operations, as the number of gaming facilities open has favorably increased revenue and operating income for the company, following the Q2 2020 closures,\u201d said the ratings agency in a note. \u201cWhile sequential improvement in 2021 is expected, Moody’s anticipates gaming activity will remain below pre-pandemic levels until at least 2022, with leverage remaining elevated.\u201d<\/p><\/blockquote>\n

At the height of the COVID-19 pandemic last year, the company slashed $100 million in costs<\/a> in an effort to firm up its balance sheet. Details on how those reductions were realized are scant, but Scientific Games stock is up 438 percent from its 52-week low.<\/p>\n

Good Discipline Paying Off for Sci Games<\/h2>\n

Scientific Games also provides lottery services<\/a> to states and wagering platforms to sportsbooks. But the investment community typically looks at the company as a slot machine maker.<\/p>\n

\n

That levers the firm to reopening trends across the country. In some states, gaming operators are employing social distancing protocols,<\/a> whereby not all slots on a casino floor are available for use. Additionally, sluggish traffic trends are prompting some gaming companies to delay deliveries of new machines. Still, Scientific Games has avenues for contending with those scenarios.<\/p>\n<\/div>\n

\u201cThe outlook change also reflects the company’s good cost discipline and more resilient lottery business,\u201d according to Moody’s. These factors, along with a pullback in capex, enabled the company to generate over $280 million of positive free cash flow in 2020, and Moody’s projects a similar free cash flow level can be achieved in 2021 despite an increase in capex.\u201d<\/strong><\/p>\n

Scientific Games’ revenue is mostly derived from play of its slots already on casino floors, sales of new machines, and its lottery business.<\/p>\n

Online Casino, Sports Betting Opportunity<\/h2>\n

While Scientific Games isn’t a consumer-facing operator, it does have leverage to the burgeoning and iGaming and sports wagering markets.<\/p>\n

\u201cThe company is also well-positioned to benefit from the growth of digital gaming products and sports betting, as these markets continue to expand and mature,\u201d notes Moody’s. \u201cSGI owns a large portfolio of complementary gaming products and services, both digital and non-digital, that it can utilize and cross-sell globally among its various distribution platforms.\u201d<\/strong><\/p>\n

For investors, that’s relevant because Goldman Sachs forecasts<\/a> US sports betting and online casinos will boom to $39 billion and $14 billion industries by 2033 from $900 million and $1.5 billion, respectively, today.<\/p>\n","protected":false},"excerpt":{"rendered":"

Gaming equipment manufacturer Scientific Games (NASDAQ:SGMS) saw its credit rating outlook boosted to \u201cstable\u201d from \u201cnegative\u201d by Moody’s Investors Service. The research firm points to a strong post-coronavirus recovery for the slots maker. Las Vegas-based Scientific Games still carries a B3 credit rating — well into junk territory. The stock gained 10.63 percent last week […]<\/p>\n","protected":false},"author":46,"featured_media":170230,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,69293],"tags":[],"acf":[],"yoast_head":"\nScientific Games Credit Outlook Improving, Rating Still Junk<\/title>\n<meta name=\"description\" content=\"Scientific Games credit outlook raised by Moody's as ratings agency forecasts sturdy lottery business.\" \/>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Scientific Games Credit Outlook Improving, Rating Still Junk\" \/>\n<meta property=\"og:description\" content=\"Scientific Games credit outlook raised by Moody's as ratings agency forecasts sturdy lottery business.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-04-12T15:09:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-04-12T17:04:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/04\/sgms.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/\",\"url\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/\",\"name\":\"Scientific Games Credit Outlook Improving, Rating Still Junk\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/04\/sgms.jpg\",\"datePublished\":\"2021-04-12T15:09:23+00:00\",\"dateModified\":\"2021-04-12T17:04:58+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Scientific Games credit outlook raised by Moody's as ratings agency forecasts sturdy lottery business.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/scientific-games-credit-outlook-improving-rating-still-junk\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/04\/sgms.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/04\/sgms.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Scientific Games slot machines. 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