RBC Capital Markets analyst Mark Wilson has initiated coverage on Light & Wonder with an ‘outperform’ rating, setting a price target of $190 per share. This target suggests a potential 41 per cent increase from the current share price of $135. The analyst’s initiation reflects optimism about Light & Wonder’s earnings per share (EPS) growth, the resilience of global gaming markets, and potential market share gains following the resolution of the Dragon Train litigation and the transition to a single ASX listing. Light & Wonder is a gaming company that develops and distributes games, systems and services for casinos, lotteries and social gaming operators. They aim to create immersive experiences for players across diverse platforms.
The recent acquisition of Grover Gaming, a company focused on the charitable gaming sector, is viewed as a strategically sound move. This acquisition is expected to increase Light & Wonder’s recurring revenue to 69 per cent of its total revenue. The company is reportedly showing strong performance in the premium lease and wide-area progressive (WAP) segments. RBC Capital Markets’ EPS forecasts for Light & Wonder are 2 to 6 per cent higher than consensus estimates, driven by the company’s deleveraging efforts and improved cash flow generation.
While highlighting several risks, including a leverage ratio of 3.7x, restructuring and legal expenses, and capitalised research and development expenditure, RBC believes the stock is attractively valued. They cited a fiscal year 2026 enterprise value to earnings before interest, taxes, depreciation, and amortisation (EV/EBITDA) ratio of 8.3x and a price-to-earnings (P/E) ratio of 11.5x. On Tuesday afternoon, shares in Light & Wonder experienced a positive bump, rising by 2.2 per cent.
