GGRAsia – JP Morgan Raises Aristocrat’s Fiscal 2022 Earnings Forecast by 8%

JP Morgan raises Aristocrat earnings forecast by 8% for fiscal 2022


A brokerage has raised its estimate of earnings for the financial year 2022 of slot machine maker and online gaming content provider Aristocrat Leisure Ltd by 8% following the company’s publication of its intermediate results.

In a note that day, JP Morgan Securities Australia Ltd said it now believed Aristocrat’s net profit after tax and amortization (NPATA) for the year ending September 30 would be close to 1.08. billion AUD (756.3 million USD), compared to its previous forecast of 996.9 million Australian dollars.

The institution also raised its forecast for the Australian-listed company’s annual earnings before interest, tax, depreciation and amortization (EBITDA) to nearly AUD 1.84 billion, up 2.9% from an estimate. previous AUD 1.78 billion.

But JP Morgan expected Aristocrat’s full-year revenue for fiscal 2022 to be 4.0% lower than its previous estimate of AUD 5.91 billion, at AUD 5.68 billion.

“Our earnings changes largely reflect [Thursday’s] exceeded our estimates for the first half of 2022, being slightly offset by certain adjustments to our digital reservations assumptions,” said JP Morgan analysts Don Carducci and Michael James.

It was on the basis that the “pipeline” for digital game releases was to be “pushed further into fiscal year 2023,” the analysts wrote.

Currently, Aristocrat offers online social gaming through its Pixel United division. The online offering is expected to be supplemented before the end of the calendar year by some real-money online gaming operations in the United States, Trevor Croker, chief executive and managing director of the Aristocrat Group, was quoted in a filing on Thursday as saying. .

Aristocrat not only had A$3.3 billion in liquidity, but also “extremely strong” free cash flow generation and a “strong growth pipeline across multiple avenues,” JP Morgan suggested.

Real-money gambling was a “missing piece for the business, although the market will see some semblance of strategy within a year,” the brokerage said.

“Given that the ‘big stick’ is approximately A$3.3 billion in cash, we are confident that Aristocrat Leisure can hit hard when and where it is needed,” in terms of growing its business, said. analysts point out.