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JP Morgan increases estimate for Aristocrat’s EBITDA by 2.4%

October 25, 2023 World Industry Updates

For the fiscal year 2023, JP Morgan Securities Australia Ltd. increased its estimate of Aristocrat Leisure Ltd.’s adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) by 2.4 percent. The current estimate for these earnings for the fiscal year that ends on September 30, 2023, is little over AUD2.10 billion (about US$1.34 billion). Compared to their initial estimate of somewhat more than AUD2.05 billion, this is an increase.

According to the brokerage, Aristocrat Leisure’s strong free cash flow output has led to a strong balance sheet even after the acquisition of NeoGames and the current share repurchase plan were completed. The whole deal, valued at AUD1.80 billion and financed with available funds, saw Aristocrat Leisure pay US$29.50 in cash for each share in NeoGames SA.

As of March 31, Aristocrat Leisure has about AUD3.5 billion in liquid assets that it could use to fund current and upcoming projects. According to JP Morgan, the company will make AUD6.14 billion in sales in its fiscal year 2023, a 10.2 percent increase from the year before. It will also have a net profit after taxes of AUD1.24 billion for the fiscal year that ends on September 30, up from AUD949.0 million in the year before.

Aristocrat Gaming, which focuses on the land-based casino and gaming industry, Pixel United, which focuses on online social games, and Anaxi, which focuses on online real-money gambling, comprise Aristocrat Leisure. Analysts at JP Morgan predict a 1% decline in group bookings, with social casino growth somewhat offsetting losses in social casual bookings.

Additionally, they said that Aristocrat Leisure has continued to place a high priority on its efforts in content creation. Experts believe that the company’s goal of investing 11–12% of its revenues on design and development gives them a competitive advantage over competitors.