NEW YORK (TheStreet) -- Shares of Scientific Games Corp. (SGMS) closed down 2.09% to $16.37 on Tuesday after Deutsche Bank reiterated its "sell" rating although it raised its price target to $11 from $7.
"We believe that there are too much financial leverage in a business with challenged fundamentals across most business segments, a legacy inability to generate meaningful discretionary cash flow, and a stretched valuation relative to peers and sector historical multiples," Deutsche Bank analysts said.
Additionally, continued core gaming equipment trend deterioration and over-aggressive free cash flow targets are downside catalysts as well, Deutsche Bank added.
Scientific Games is a developer of technology-based products, services and is a supplier of solutions to lottery and gaming organizations across the world.
Separately, TheStreet Ratings team rates SCIENTIFIC GAMES CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate SCIENTIFIC GAMES CORP (SGMS) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and weak operating cash flow."