On Wednesday, Light & Wonder (NASDAQ: LNW) received an updated price target from Susquehanna, which was increased to $111 from the previous $100, while the firm maintained a Positive rating on the stock. This adjustment comes after the company's fourth-quarter performance in 2023, which continued its trend of strong results throughout the year, notably in international sales of its gaming units.
The company's recent earnings call highlighted comments from the CEO regarding an expected uptick in the North America-based Game Operations (Game Ops) segment. This segment is particularly significant as it represents approximately 73% of the total EBITDA within Light & Wonder’s gaming division. The anticipation of growth in this area contributed to the analyst's decision to raise the price target.
The analyst underlined the fourth quarter's outperformance as a reflection of the company's successful international sales strategy for its gaming units. The positive outlook on the Game Ops segment, deemed as the most profitable subsection of the company's gaming division, was a key factor in reaffirming the Positive rating.
The reiteration of the Positive rating and the increased price target to $111 demonstrate confidence in Light & Wonder's business trajectory. The CEO's remarks on the earnings call suggest a potential increase in profitability for the company's core gaming operations in the near future.
Light & Wonder's stock adjustment follows a year of consistent outperformance, with the fourth quarter's results cementing the company's strong position in the gaming industry. The raised price target reflects the analyst's optimism about the company's continued growth and profitability.
InvestingPro Insights
Following the optimistic outlook from Susquehanna, Light & Wonder's (NASDAQ: LNW) financial metrics and market performance further strengthen the case for their positive trajectory. With a substantial market capitalization of $8.68 billion, the company stands as a significant player in the gaming industry. The impressive gross profit margin of 70.07% in the last twelve months as of Q3 2023, as reported by InvestingPro, underscores the company's efficiency and profitability in its operations.
An InvestingPro Tip that aligns with the sentiments expressed by the CEO is the expectation of net income growth this year, which may provide additional confidence to investors. Moreover, the company's stock has experienced a significant return over the last week, with a price total return of 9.56%, highlighting the recent positive momentum in the market.
Investors should note that the P/E ratio stands at 55.2, indicating a high earnings multiple which suggests a premium valuation by the market. The robust revenue growth of 16.67% over the last twelve months further validates the company's expansion and the success of its international sales strategy.
For those seeking more insights, there are 18 additional InvestingPro Tips available for Light & Wonder at https://www.investing.com/pro/LNW. To take advantage of these insights, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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