Light & Wonder on Pace to Top 2025 EBITDA Forecast

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Posted on: January 30, 2024, 03:21h. 

Last updated on: January 31, 2024, 11:35h.

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Helped by caller slot machines and spot successful nan land-based casino industry, Light &Wonder (NASDAQ: LNW) is connected gait to hit a antecedently disclosed 2025 net earlier interest, taxes, depreciation, and amortization (EBITDA) estimate.

Light & Wonder stockThe Light & Wonder logo. The institution could hit 2025 EBITDA forecasts, says JPMorgan. (Image: PR Newswire)

That’s nan return of JPMorgan, which sees nan gaming instrumentality shaper beating nan $1.4 cardinal 2025 EBITDA outlook nan institution revealed 2 years ago. The slope added its outlook includes imaginable upside of 2% to 5% to statement forecasts connected Light & Wonder’s 2023 done 2025 EBITDA outlook. New slot titles, including those featured successful Australia, are helping Light & Wonder’s cause.

Early capacity from nan caller Dragon Train family of games successful Australia demonstrates bully early execution,” noted JPMorgan.

Light & Wonder rolled retired nan Dragon bid of gaming machines past August to summation much stock successful Australia.

Australia Marquee Market

Last May, Light & Wonder commenced a secondary listing connected nan Australian Securities Exchange (ASX), affirming its committedness to Australia. At nan user level, nan Dragon family of games extends that commitment.

“This family of games has lifted Light & Wonder’s mean turnover ratio from 0.55 to 0.76 successful New South Wales, and 0.82 to 1.00 successful Queensland,” added JPMorgan.

Regarding Light & Wonder’s finances, nan institution is progressively a free rate travel story. Accompanied by quickly declining leverage, nan firm’s free rate travel margins are exceeding those of comparably weighted manufacture peers.

In 2021, Light & Wonder sold its lottery and sports betting units, generating $7 cardinal successful rate that’s been prudently utilized to slash indebtedness and money stock repurchases. Due to that influx of cash, JPMorgan sees nan gaming institution continuing to thrust leverage lower, perchance signaling that an inflection constituent for free rate travel procreation is nearing.

“Third-quarter 2023 was nan first 4th Light & Wonder deed its FCF/EBITDA conversion target. We expect further betterment from here,” according to nan bank.

Light & Wonder Catalysts

Light & Wonder delivers fourth-quarter results connected February 27, and that could beryllium a catalyst, because nan institution hit net per stock (EPS) estimates successful nan anterior 2 quarters and it’s connected a six-quarter streak of topping Wall Street gross forecasts.

Another imaginable spark for Light & Wonder shares is nan anticipation that analysts will raise value targets connected nan sanction arsenic it trades higher. Currently, nan statement value outlook connected nan banal is $93.75, which implies upside of 13.70.

Of nan 12 sell-side analysts that screen nan gaming instrumentality maker, 8 complaint it “strong buy,” while 1 calls it a “buy,” and 3 standing nan banal “hold.”

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