Analyst initiates coverage

Wednesday, July 17, 2002 | 11:15 a.m.

Bear, Stearns & Co. gaming analyst Jason Ader has initiated coverage of Scientific Games Corp., a leading provider of technology and other services to the pari-mutuel wagering industry and instant lottery ticket business.

Ader has a "buy" rating on the stock and a 12-month price target of $12.

New York City-based Scientific Games was formed through a $308 million acquisition of Scientific Games Holdings, a supplier of instant ticket systems to lotteries worldwide, by Autotote Corp., a pari-mutuel wagering company.

Ader said he projects earnings growth of 20 to 25 percent annually over the next three years, helped by better-than-expected growth in its pari-mutuel business, new online lottery contracts and introducing video lottery terminals to additional racetracks.

The investment banking firm Bear Stearns was the lead manager on an $86 million stock offering for the company this month.

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