On Wednesday, Jefferies updated its outlook on Light & Wonder (NASDAQ:LNW), raising the price target to $118 from $113, while reiterating a Buy rating on the stock. The firm's analyst noted that after meetings with the company's management both before and after Nantucket, adjustments were made to their financial model in anticipation of the second quarter.
Management's reiterated confidence in accelerating the business to meet its 2025 target of $1.4 billion in Adjusted EBITDA was highlighted as a key takeaway from these discussions.
The analyst pointed out that management's communication has become more detailed regarding the growth drivers necessary for achieving its 2025 financial targets. This detailed approach is seen as a positive step towards providing a clearer roadmap for the company's growth strategy. According to Jefferies, these growth drivers will require broad and robust execution from the company.
The firm believes that their estimates for Light & Wonder are strong and suggest an upward trajectory towards the 2025 goals set by the company. The confidence in the company's direction and the potential for growth is reflected in the increased price target. Jefferies' stance indicates a positive outlook for Light & Wonder's stock performance in the coming years.
Light & Wonder's management's commitment to reaching its ambitious 2025 financial target is a significant factor in the analyst's optimistic view. The company's focus on detailing the necessary steps to drive growth and improve performance is seen as a key component in achieving these long-term objectives.
Investors and market watchers will likely keep a close eye on Light & Wonder's progress towards its strategic goals, as well as any further insights provided by the company's management or updates from financial analysts. The raised price target from Jefferies serves as an indicator of the firm's belief in the company's ability to execute its growth plan and deliver on its financial promises.
In other recent news, Light & Wonder reported a strong first quarter, with a 13% increase in consolidated revenue to $756 million, marking its 12th consecutive quarter of year-over-year growth.
The gaming segment experienced a 30% rise in global game sales revenue, contributing to a 22% increase in adjusted NPATA to $105 million. The company's future plans include an ambitious revenue target of $1.4 billion, as stated by CFO Oliver Chow.
Light & Wonder also emphasized its expansion plans into various markets including the Illinois VGT market, Canadian VLT market, HHR expansion, and West Virginia VLTs. The company is exploring merger and acquisition opportunities that align with its core business and aims to maintain a net debt leverage ratio of 3.0 times, with $1.2 billion of available liquidity.
Notably, the SciPlay (NASDAQ:SCPL) segment saw an 11% rise in revenue to $206 million, driven by player engagement and monetization. The iGaming segment also saw a 14% increase in revenue to a record $74 million, fueled by content launches and market expansion. These are among the key recent developments for Light & Wonder.
InvestingPro Insights
Recent data from InvestingPro provides a deeper look into Light & Wonder's financial health and market performance. With a market capitalization of $9.21 billion and a robust gross profit margin of 70.25% over the last twelve months as of Q1 2024, the company's profitability measures appear strong. This is further supported by a significant year-to-date price total return of 25.59%, indicating positive investor sentiment.
Light & Wonder's ability to exceed expectations is also echoed in the InvestingPro Tips, which highlight that net income is expected to grow this year, and four analysts have revised their earnings upwards for the upcoming period.
Moreover, the company's stock price has been quite volatile, which may present opportunities for investors with a higher risk tolerance. For those interested in exploring further insights and tips, InvestingPro offers additional metrics and analysis, with the option to apply the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
The data and tips provided by InvestingPro align with the positive assessment from Jefferies, reinforcing the potential for Light & Wonder to meet its 2025 financial targets. Investors considering this stock will find value in the detailed analysis and real-time metrics available through InvestingPro, which currently lists several additional tips for a comprehensive investment strategy.
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