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On Tuesday, Benchmark analyst Mike Hickey maintained a Buy rating on Light & Wonder shares, with a $100.00 price target. Hickey highlighted the company’s successful shift into a high-margin, content-led global games business. Light & Wonder has significantly reduced its net debt leverage from 10.5 times in 2022 to 3.0 times in the first quarter of 2025. During this period, the company has also returned $1.2 billion to its shareholders and achieved AEBITDA margins of 40%.
The management team at Light & Wonder has confirmed its full-year target of $1.4 billion in AEBITDA and set an ambitious goal of reaching $2 billion by 2028. This objective suggests a compound annual growth rate (CAGR) of 12.6% from 2025. The Gaming segment, which is the company’s largest, contributing 65% to revenue and 74% to AEBITDA, is expected to be the key driver of this growth. This segment is set to benefit from content leadership, an expanding install base, and new high-margin verticals, including charitable gaming.
The upcoming integration of Grover into Light & Wonder’s Gaming division is poised to start in the second quarter and is anticipated to add approximately $111 million in AEBITDA. This move is expected to provide immediate scale to the company in an underpenetrated and high-growth market category. Light & Wonder’s strategic initiatives and robust management execution are pivotal factors in the company’s next phase of growth, as emphasized by the Benchmark analyst.
In other recent news, Light & Wonder has secured an $800 million credit facility to support its acquisition of Grover Gaming’s charitable gaming business, a transaction valued at $850 million. This financial move, detailed in a recent SEC filing, represents a strategic expansion for the company in the gaming sector. The acquisition was completed with a cash payment and includes a future revenue-based earn-out. On the earnings front, Light & Wonder’s first-quarter financial results for 2025 fell short of market expectations, with consolidated revenue reported at $774 million, below the anticipated $807 million. Despite this, the company achieved its 16th consecutive quarter of year-over-year revenue growth, with an expansion in its consolidated AEBITDA margin.
Analyst firms have responded with mixed adjustments to their price targets for Light & Wonder. Benchmark reduced its price target to $100 from $130, maintaining a Buy rating despite the revenue miss. Meanwhile, Stifel raised its price target to $95 from $84, retaining a Hold rating, noting the company’s robust North American replacement sales. Jefferies also adjusted its target to $116 from $121, citing confidence in the company’s strategic initiatives and market positioning. Truist Securities maintained a Buy rating with a $110 price target, emphasizing the company’s strategic vision and long-term financial goals. These recent developments reflect the company’s ongoing efforts to strengthen its market position and deliver sustained growth.
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