Fannie Mae, Freddie Mac shares tumble after conservatorship comments
On Wednesday, Macquarie analyst Chad Beynon increased the price target for Light & Wonder (NASDAQ:LNW) to $125 from the previous target of $122, while maintaining an Outperform rating on the company’s shares. The adjustment follows Light & Wonder’s reported fourth-quarter earnings before interest, taxes, depreciation, and amortization (AEBITDA) of $315 million, a year-over-year increase of 4%. This figure surpassed the consensus estimate by $7 million, or 2%, as compiled by Visible Alpha.
Despite facing challenges in the land-based gaming sector during the fourth quarter, Light & Wonder achieved a net addition of 850 installations sequentially. However, outright sale volumes did not meet expectations. Notably, the company maintained its number one position in ship share within the U.S. and Australia markets. The company’s social gaming division, SciPlay (NASDAQ:SCPL), exceeded margin expectations, benefiting from a 13% direct-to-consumer penetration rate and reduced marketing expenditures. Additionally, Light & Wonder’s iGaming segment performed well in terms of revenue.
During the same period, Light & Wonder accelerated its share repurchase program, buying back $243 million worth of shares, which represents 53% of the total planned acquisitions through 2024, amounting to $462 million. Analysts at Macquarie have highlighted several key points for consideration regarding Light & Wonder’s near-term prospects. These include expected growth in North American Gaming Operations, sales predictions, SciPlay margin stability, iGaming growth and margins, and the impact of Grover Gaming’s inclusion in the second half of 2025 on cash flow.
Macquarie continues to project a 2025 AEBITDA of $1.4 billion for Light & Wonder, excluding Grover Gaming, marking a 12% increase year-over-year. Including Grover Gaming, the forecast rises to $1.46 billion, with an anticipated EBITDA margin of 34%, improving by 1.5 percentage points from the previous year.
In other recent news, Light & Wonder Inc. reported impressive earnings for the fourth quarter of 2024, with an earnings per share (EPS) of $1.42, significantly surpassing the anticipated $0.94. The company experienced a slight revenue shortfall, achieving $797 million compared to the expected $805 million, yet still marked a 4% year-over-year increase. Additionally, Light & Wonder announced a strategic acquisition of Grover Gaming’s charitable gaming business for $850 million, further diversifying its operations. The acquisition is expected to enhance the company’s revenue model with Grover’s strong customer relationships and growth outlook.
Analysts noted Light & Wonder’s robust full-year performance, with consolidated revenue rising to $3.2 billion, a 10% increase from the previous year. The company’s operating income and EBITDA also saw significant growth, highlighting effective cost management and strategic initiatives. Looking ahead, Light & Wonder aims for an EBITDA of $1.4 billion in 2025, with expectations of continued growth in consolidated EBITDA for the first quarter. The company is also considering a dual primary listing on the ASX, reflecting its commitment to optimizing shareholder value.
Despite challenges such as supply chain issues and regulatory changes in new markets, Light & Wonder remains focused on growth and profitability. The company continues to invest in its gaming and iGaming sectors, with plans to release additional games and expand its market presence. These developments underscore Light & Wonder’s strategic direction and potential for future success.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.