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On Friday, Benchmark analyst Mike Hickey increased the price target for Light & Wonder (NASDAQ: LNW) to $130 from the previous target of $114, while continuing to endorse the stock with a Buy rating. Hickey’s decision follows Light & Wonder’s release of their fourth-quarter financial results for 2024, which, although falling short of revenue forecasts, surpassed the consensus for Adjusted EBITDA.
The company reported their Q4 2024 performance, indicating a slight miss in revenue but a notable achievement in Adjusted EBITDA, surpassing market expectations. Despite this, Light & Wonder confirmed their Adjusted EBITDA guidance for the full year of 2025 at $1.4 billion. The guidance is underpinned by anticipated sustained revenue growth, which the company attributes to strategic investments in key areas such as Gaming, SciPlay (NASDAQ:SCPL), and iGaming.
Light & Wonder is also in the process of acquiring Grover Gaming, with the deal expected to be finalized in the second quarter of 2025. This acquisition is seen as a strategic move to further diversify the company’s revenue streams. Additionally, Light & Wonder is actively executing a $1 billion share repurchase program, illustrating a commitment to returning value to shareholders.
Hickey highlighted that no significant U.S. iGaming legislation is expected to pass in 2025. However, Light & Wonder’s strategy is not solely reliant on domestic growth. The company is looking to expand into Brazil and other international markets, which are considered crucial for long-term growth.
The analyst underscored Light & Wonder’s positioning for sustainable, long-term shareholder value creation. This optimistic outlook is based on the company’s robust content pipeline, strategic market expansion efforts, and disciplined financial management practices.
In other recent news, Light & Wonder reported its fourth-quarter revenue for 2024, reaching $797 million, which aligned with market expectations but slightly missed an earlier forecast of $805 million. The company’s earnings per share (EPS) were a standout, at $1.42, significantly surpassing the anticipated $0.94. This strong performance was complemented by an adjusted EBITDA of $315 million, exceeding consensus estimates by $7 million. Macquarie analysts raised their price target for Light & Wonder to $125, maintaining an Outperform rating, while Mizuho (NYSE:MFG) Securities increased their target to $80, keeping an Underperform rating.
Despite challenges in the land-based gaming sector, Light & Wonder maintained its leading position in ship share within the U.S. and Australia markets. The company also accelerated its share repurchase program, buying back $243 million worth of shares. Additionally, Light & Wonder’s social gaming division, SciPlay, exceeded margin expectations, benefiting from a 13% direct-to-consumer penetration rate. Looking ahead, Macquarie projects a 2025 AEBITDA of $1.4 billion for Light & Wonder, excluding Grover Gaming, with an increase to $1.46 billion when including Grover Gaming.
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