Global gaming supplier Light & Wonder is on track to exceed its stated target of reaching annual EBITDA of US$1.4 billion by 2025, according to investment bank JP Morgan.
The prediction formed part of a Tuesday note from JP Morgan’s Australian-based analyst Don Carducci after he initiated coverage on Light & Wonder this week in the wake of the company’s recent secondary listing on the Australian Securities Exchange. Carducci has also set a price target of US$98.00, with shares sitting at US$82.46 at NASDAQ market close.
Providing a positive outlook on the company’s position in the Australian market, Carducci wrote, “Tracking LNW’s recently launched family of games in Australia gives us confidence in the direction of travel for the company to achieve similar growth in the much larger US profit pool.
“LNW will exceed its 2025 EBITDA target of US$1.4 billion and our estimates present 2%/4%/5% upside to FY23/24/25 consensus.”
The analyst’s comments come after Light & Wonder revealed its US$1.4 billion EBITDA target during an investor day in mid-2022 – shortly before a corporate restructure that saw Matt Wilson become the company’s new CEO in October 2022.
In a recent interview with Inside Asian Gaming, Wilson provided further detail on the ambitious target, stating, “When we put those investor targets out in May of 2022, we were a long way from US$1.4 billion EBITDA, but we have a history as a management team of dreaming big, of being bold and ambitious. And I came here to be part of a transformation. I didn’t come here to be incrementally better.
“We want to be a company that’s doing big things and big transformational things, and with that comes big goals. Goals are things that push you to do more than you think is achievable. And so, when we put those numbers out, we got no credit for them. People thought it was a nice fictional story. But … we’ve had sequential quarters of amazing growth, and I think people are now saying, ‘Wow, they’re actually on the path to do this’.”
According to Carducci, Light & Wonder can expect a boost from the recent release of its new Dragon Train family of games, which was “developed specifically with the Australian player and customer in mind”.
“This family of games has lifted Light & Wonder’s average turnover ratio from 0.55 to 0.76 in New South Wales, and 0.82 to 1.00 in Queensland,” the analyst said, adding that Dragon Train should reach 8,000 installed games in NSW and Queensland by FY25, up from 1,700 in 4Q23.
