Shares of Light & Wonder Inc (ASX: LNW) experienced a significant surge of 11.06% today, reaching $138.90 each. This increase follows a substantial recovery since the company hit a two-year low on October 31, 2023, with shares having risen by 27.04% since that date. Currently, the stock is nearly breakeven compared to this time last year, showing just a 0.42% decline over the past twelve months.
Recent announcements from Light & Wonder have positively influenced investor sentiment. The company released its Q3 FY25 report last Thursday, revealing a remarkable 78% increase in net income alongside a 3% rise in consolidated revenue. The adjusted earnings per share stood at $1.34, surpassing estimates but not quite meeting revenue forecasts.
In addition to its earnings report, Light & Wonder announced the extension of its share repurchase program to include the buyback of its CHESS Depositary Interests (CDIs) on the ASX, effective from November 7, 2023. This update follows a prior announcement that the company will cease trading on the Nasdaq on November 12, 2023, transitioning to a primary listing on the ASX. This strategic move aims to consolidate trading liquidity within the Australian stock market.
Looking ahead, analysts are optimistic about the future of Light & Wonder shares. TradingView data indicates that out of 23 analysts, 17 have rated the shares as a buy or strong buy. The maximum projected upside for the stock is $253, suggesting a potential increase of 82.03%. Even the average forecast of $120.90 reflects a considerable upside of 23.48% based on the current share price.
Last week, analysts at Macquarie reaffirmed their buy rating on the stock, adjusting their price target to $170, which aligns closely with the average estimates. They noted that while the ASX listing and ongoing litigation currently dominate investor attention, there is potential for a re-rating once these issues are resolved over the next six to twelve months.
Similarly, analysts at Morgans rated Light & Wonder as a buy, forecasting a target price of $175 over the next year. They highlighted the strength of the third quarter update and expressed confidence in the company’s ability to meet its fiscal year 2025 guidance.
Meanwhile, Bell Potter also assigned a buy rating with a target price of $176, advising investors to focus on long-term prospects despite short-term litigation risks.
With its recent performance and positive analyst outlooks, Light & Wonder appears well-positioned for growth in the coming months, making it a noteworthy consideration for investors.
