Jefferies Equity Research analyst Kai Erman raised his projections for Aristocrat Leisure after seeing the Australian company take market share in both terrestrial gambling and social casinos. His findings were published in a February 7 investor note.
Erman lifted his price target for Aristocrat to AU$85, up from $77 per share. He also restated a Buy rating on the stock, which isn’t traded stateside.
Aristocrat’s Phoenix Link game is penetrating 40 casinos a week, per Erman, “and performance remains robust.” He wrote that the feedback from the casino industry was that Phoenix Link was outperforming comparable slot machines. Erman lauded the depth of Aristocrat’s portfolio of games, saying they should continue to perform well.
In the second half of 2024, Aristocrat delivered 3,900 devices. This gave Erman confidence that the company would hit 5,730 installations in the 2025 fiscal year.
The analyst was also impressed by Aristocrat’s social-numbers, which included 40 percent cash flow margins. He pegged the company’s market share at 15 percent.
Erman also expected future Aristocrat earnings guidance to be “skewed to the upside. From our observations, ALL is gaining share across all key categories,” he explained.
Jefferies opined that the market’s consensus on Aristocrat was too low, reflecting only land-based gambling. “Incremental data points across all key operating segments continue to be positive,” Erman wrote, upgrading his earnings-per-share forecasts by low double digits.
