Light & Wonder maintains price target despite legal setback By Investing.com

On Wednesday, Light & Wonder (NASDAQ:LNW) received a buy rating from a Benchmark analyst with an unchanged price target of $114 despite a legal challenge. The U.S. District Court of Nevada issued a temporary restraining order halting the sale of Light & Wonder’s Dragon Train game amid litigation with Aristocrat.

Despite these legal obstacles, the company confirmed its 2025 AEBITDA target and emphasized strong growth across all business areas. The analyst notes that the financial impact of the lawsuit is expected to be insignificant. Light & Wonders’ diverse portfolio, which includes several successful franchises, is seen as a key factor for continued growth.

Development of new versions of the Dragon Train game is already underway, underscoring the company’s resilience and commitment to its product line. The analyst’s affirmation of the Buy rating and price target reflects the view that the recent decline in Light & Wonder stock represents a buying opportunity for investors.

Looking ahead, the company was preparing to showcase its revised growth strategy at the upcoming Global Gaming Expo (G2E). This event is expected to provide a platform for Light & Wonder to showcase its future plans and convince stakeholders of its market position.

In other recent news, Light & Wonder reported a 12% increase in second quarter consolidated revenue to $818 million, while operating income rose to $175 million. The company initiated a $1 billion share buyback program and set a goal of achieving $1.4 billion in EBITDA by 2025.

UBS upgraded Light & Wonder from Neutral Buy, recognizing progress in various gaming sectors and forecasting further growth. However, a legal setback related to the “Dragon Train” franchise led Stifel and Susquehanna to revise their price targets to $100 and $90, respectively.

Maxim Group initiated coverage of Light & Wonder with a buy rating and a price target of $144, forecasting revenue growth of 11% in 2024 and 8% in 2025. Light & Wonder also announced a regulatory update to the Australian Securities Exchange regarding its CHESS Depositary Interests, underscoring the company’s commitment to international regulatory compliance.

InvestingPro Insights

Following the recent developments at Light & Wonder (NASDAQ:LNW), investors might find valuable InvestingPro’s current data evaluating the company’s financial health and market potential. The company has a market capitalization of about $8.14 billion, and its trailing twelve-month revenue through Q2 2024 is $3.07 billion, representing a solid growth of 12.75%. This, coupled with an impressive gross profit margin of 70.46%, highlights the company’s ability to remain profitable despite market challenges.

InvestingPro Tips suggests that Light & Wonder is expected to post net income growth this year, and the company’s stock is currently in oversold territory according to the Relative Strength Index (RSI). These insights are especially relevant given the analyst’s bullish outlook and the company’s confirmation of its 2025 AEBITDA target. Despite recent volatility in the share price, which saw a significant record last week, the company’s strong fundamentals could present a compelling case for investors looking for long-term growth opportunities.

For those who want to dive deeper, InvestingPro Tips is available to provide further analysis on Light & Wonder’s financial performance and stock trends. With the company trading at a high price-to-book ratio of 10.34 and analysts forecasting profitability this year, the upcoming Global Gaming Expo provides an opportune time for investors to assess the company’s performance and strategic initiatives.

For a comprehensive look, investors can explore the full list of 12 InvestingPro picks that provide a detailed perspective on Light & Wonder’s investment potential.

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