Aristocrat Leisure (ASX: ALL) gains limelight amidst positive outlook by analysts

May 17, 2024 11:02 AM AEST | By Team Kalkine Media

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Aristocrat Leisure (ASX: ALL) gains limelight amidst positive outlook by analysts — Image source: © G0r3cki | Megapixl.com

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Analysts at Morningstar have revised their fair value estimate on Aristocrat Leisure (ASX: ALL) upward by 7% to A$U48 per share, citing the company's stronger-than-expected performance. The brokerage also raised its FY24 underlying net profit estimates for Aristocrat Leisure by 13% to AU$1.5 billion (approximately $1 billion USD).

"We lift our fair value estimate for Aristocrat Leisure due to the increase in near-term earnings, a larger installed base leading to higher longer-term earnings, and the time value of money," stated Morningstar analysts.

In line with this positive sentiment, analysts at Jefferies upgraded their rating on Aristocrat Leisure from "underperform" to "hold" and increased their price target to AU$41.15 from AU$36.45. Jefferies also raised its FY24 segment EBITA (earnings before interest, taxes, and amortization) estimates by 4%.

Aristocrat Leisure, a mobile games developer, reported a notable 17% rise in half-year net profit after tax (NPAT) to AU$723.3 million, with operating revenue increasing by 6.1% to AU$3.27 billion. This robust financial performance contributed to the positive outlook among analysts and investors.

According to data from the London Stock Exchange Group (LSEG), nine out of eleven analysts covering Aristocrat Leisure rate the stock as a "buy" or higher, with two analysts recommending a "hold." The median price target for the stock stands at AU$48.57, reflecting confidence in the company's growth prospects.

On the market front, Aristocrat Leisure's stock has demonstrated resilience, posting a gain of approximately 12% year-to-date as of the last trading session. This upward momentum underscores investor confidence in the company's performance and future potential in the mobile gaming industry.

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