Aristocrat Leisure (ASX: ALL) Surges 2% on Morgan Stanley's Bullish Price Target

May 20, 2024 03:44 PM AEST | By Team Kalkine Media

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Aristocrat Leisure (ASX: ALL) Surges 2% on Morgan Stanley's Bullish Price Target — Image source: Shutterstock.com

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Shares of Australia's Aristocrat Leisure (ASX: ALL) experienced a notable increase, climbing as much as 2% to reach AU$47.340 during Monday’s afternoon trading hours. The positive momentum follows an upward revision of the gaming firm's price target by analysts at Morgan Stanley, who raised it to AU$49.5 from AU$46.95 while retaining an "overweight" rating on the stock.

According to Morgan Stanley, Aristocrat Leisure's second-quarter results surpassed expectations, constituting a solid beat compared to consensus estimates. This outperformance was attributed to stronger revenues and decreasing costs, signaling improved operational efficiency and financial health for the company.

The brokerage firm also adjusted its estimates for Aristocrat Leisure's net profit after tax attributable for FY24 and FY25, increasing them by 3.2% and 7.1%, respectively. These upward revisions reflect Morgan Stanley's confidence in the company's ability to sustain its growth trajectory and deliver robust financial performance in the coming years.

Aristocrat Leisure recently announced that it is conducting a strategic review of its casual and mid-core gaming assets, a move that Morgan Stanley views positively as indicative of the company's commitment to maximising shareholder value. By reassessing its portfolio and strategic priorities, Aristocrat Leisure aims to capitalise on emerging opportunities in the gaming market and strengthen its competitive position.

The stock has demonstrated resilience and upward momentum, rising by 13.4% year-to-date as of the last close. This consistent growth trajectory underscores investor confidence in Aristocrat Leisure's business model, strategic direction, and growth prospects.

Investors are likely to closely monitor Aristocrat Leisure's strategic initiatives and financial performance in the coming quarters, particularly in light of the ongoing strategic review of its gaming assets.

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