Aristocrat Leisure Limited (ALL) – On a roll
December 6, 2024
Aristocrat Leisure Limited is a gaming content, hardware and technology company in Australia and internationally. It operates through three segments: Gaming, Pixel United, and Interactive. Aristocrat Leisure was founded in 1950 and is headquartered in North Ryde, Australia.
Aristocrat Leisure (ALL) posted FY24 operating earnings slightly ahead of consensus, as US game installations came in ahead of company guidance, while year-on-year (YoY) EPS rose an impressive 20%. Overall, the result showed another strong performance from the electronic gaming machine (EGM) and social casino group, and provides a solid foundation for further stellar growth in EPS, even accounting for the impact of the US$620 million ($955 million) sale of its Plarium Global mobile gaming business.
Ord Minnett sees increased revenue from the participation market as central to the case for EPS growth. This market now accounts for circa 50% of Aristocrat’s earnings before interest and tax (EBIT). We also expect EPS to be boosted by a rising share of the ship-share segment.
Post the result and incorporating the sale of Plarium, we have raised our EPS estimates for FY25 by 1% for FY25 and by 3% for FY26 and FY27. This leads us to raise our target price to $72.00 from $59.00, while we maintain our Accumulate recommendation.
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