SGR has already fallen -51% this financial year in a much-publicised rout with the casino operator facing huge fines for a plethora of transgressions. The company downgraded earnings by around 15% in April, blaming regulatory restrictions and a deteriorating consumer environment while at the same time announcing further cost-cutting measures, SGR has since found some love with the stock little changed since the announcement i.e. the downside momentum is waning as intrinsic value starts to present itself. The risk profile is wide for SGR but the value is returning for this unpopular business depending on the potential NSW casino duties with very real risks that NSW Labor may restructure the business model.
- We believe SGR will trade between $1.10 and $1.50 through 2023 providing solid opportunities for active/aggressive investors.
MM may reassess SGR if it makes fresh lows for 2023.
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