After a review of Aristocrat forecasts, the broker has decided digital, which currently represents some 28% of profit, may have reached an inflection point. Better growth is expected from FY20 and beyond supported by recent Social Casual releases and improvements in Social Casino.
The broker continues to believe the stock looks attractive, offering 17% two-year compound earnings growth on a 19x forward PE and a -10% discount to the All Industrials ex-financials. Outperform retained, target rises to $31.50 from $31.00.
Sector: Consumer Services.
Target price is $31.50.Current Price is $29.84. Difference: $1.66 – (brackets indicate current price is over target). If ALL meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).