On Monday, Redburn-Atlantic changed its stance on Light & Wonder (NASDAQ:LNW), moving from a 'Buy' to a 'Neutral' rating. The firm has set a price target of $110.00 for the company's shares. The revision comes after a significant increase in the company's stock price, which has risen by approximately 37% since coverage was initiated in August 2023.
The analyst from Redburn-Atlantic indicated that the initial recommendation was based on an anticipated turnaround story that would lead to robust earnings growth and a revaluation of the company's stock. The expected growth and revaluation have materialized, reflected in the stock's notable price increase. However, the analyst now anticipates that the growth in machine sales will stabilize, which in turn is likely to normalize the growth in the company's overall revenue and EBITDA.
The downgrade to a 'Neutral' rating suggests that while the turnaround for Light & Wonder is still in progress, the rapid growth previously predicted may not sustain at the same rate. The new price target of $110.00 aligns with this revised expectation of the company's financial performance.
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