Goldman Sachs raises Aristocrat Leisure stock rating to buy

Published 28/01/2025, 07:30
Goldman Sachs raises Aristocrat Leisure stock rating to buy

The analyst also pointed to Aristocrat Leisure's significant exposure to the U.S. market, which accounts for over 80% of its revenue of $4.57 billion. Goldman Sachs' global economists predict a solid growth in disposable income in 2025, which is likely to support expenditure in casinos and slots. Additionally, the depreciation of the Australian dollar by 10% since September 2024 has led to revised foreign exchange assumptions, from 0.66 to 0.64 AUD/USD, resulting in a 2-3% increase in EBITA projections for Aristocrat Leisure. Subscribers to InvestingPro can access 17 additional investment tips and comprehensive financial metrics for deeper analysis.

The analyst also pointed to Aristocrat Leisure's significant exposure to the U.S. market, which accounts for over 80% of its revenue of $4.57 billion. Goldman Sachs' global economists predict a solid growth in disposable income in 2025, which is likely to support expenditure in casinos and slots. Additionally, the depreciation of the Australian dollar by 10% since September 2024 has led to revised foreign exchange assumptions, from 0.66 to 0.64 AUD/USD, resulting in a 2-3% increase in EBITA projections for Aristocrat Leisure. Subscribers to InvestingPro can access 17 additional investment tips and comprehensive financial metrics for deeper analysis.

Furthermore, Aristocrat Leisure's successful intellectual property defense of its popular game Dragon Link was noted as a positive factor. The company's return to its core slots content following the proposed sale of Plarium is seen as a strategic move, with expectations that Pixel's social casino portfolio will contribute to a 2-3% annual increase in top-line revenue, leveraging land-based synergies to gain market share.

The analyst also pointed to Aristocrat Leisure's significant exposure to the U.S. market, which accounts for over 80% of its revenue of $4.57 billion. Goldman Sachs' global economists predict a solid growth in disposable income in 2025, which is likely to support expenditure in casinos and slots. Additionally, the depreciation of the Australian dollar by 10% since September 2024 has led to revised foreign exchange assumptions, from 0.66 to 0.64 AUD/USD, resulting in a 2-3% increase in EBITA projections for Aristocrat Leisure. Subscribers to InvestingPro can access 17 additional investment tips and comprehensive financial metrics for deeper analysis.

The upgrade reflects a broader optimism in the company's ability to outperform in the gaming sector, especially in the digital space, as it focuses on its strengths and capitalizes on favorable economic conditions in key markets.

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