Stifel maintains hold rating on Light & Wonder stock amid challenges

On Wednesday, analysts at Stifel reiterated their Hold rating and maintained a $95 price target for Light & Wonder (NASDAQ:LNW) stock. This decision follows a series of investor meetings with the company’s Senior Vice President of Investor Relations, Nick Zangari, at the Stifel Cross Sector Insight Conference.

Stifel analysts highlighted several key takeaways from the discussions. They noted that Light & Wonder remains optimistic about achieving its newly established $2 billion AEBITDA target for 2028, despite a flat core total addressable market outlook. The company also reported solid growth in regional gross gaming revenue for the second quarter to date, which supports their North American total addressable market forecasts.

The analysts observed that Light & Wonder is seeing a positive return on its research and development investments, which bolsters the company’s confidence in its multiyear market share targets. They also mentioned the ongoing sector consolidation, which could provide the company with additional market share opportunities.

However, Stifel expressed caution due to increasingly challenging comparisons, both sector-wide and specific to Light & Wonder. The analysts cited significant macroeconomic uncertainty and potential risks to the slot replacement cycle as reasons for maintaining a cautious outlook, despite management’s confidence in achieving compelling multiyear financial targets.

In other recent news, Light & Wonder reported its first-quarter financial results for 2025, revealing consolidated revenue of $774 million, which fell short of the anticipated $807 million. The company also posted an Adjusted EBITDA (AEBITDA) of $311 million, slightly below the consensus estimate of $313 million. Despite this, Light & Wonder achieved its 16th consecutive quarter of year-over-year revenue growth, with AEBITDA margins expanding by 300 basis points to 40%. The company has set a full-year 2025 AEBITDA target of $1.4 billion, aligning with current consensus estimates. Additionally, Light & Wonder secured an $800 million credit facility to support its acquisition of Grover Gaming’s charitable gaming business, a transaction valued at $850 million.

Analysts have offered varied perspectives on Light & Wonder’s future. Benchmark revised its price target to $100, maintaining a Buy rating, while Truist Securities reiterated a Buy rating with a $110 price target, emphasizing the company’s strategic vision and long-term financial goals. Jefferies also kept a Buy rating but adjusted the price target to $116, citing confidence in the company’s growth drivers and market positioning. The integration of Grover into Light & Wonder’s Gaming division is anticipated to add approximately $111 million in AEBITDA, bolstering the company’s presence in a high-growth market. These developments highlight Light & Wonder’s ongoing strategic initiatives and financial aspirations.

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