Mike Hickey, an analyst from Benchmark Co., maintained the Buy rating on Light & Wonder (LNW – Research Report). The associated price target remains the same with $114.00.
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Mike Hickey has given his Buy rating due to a combination of factors, primarily stemming from Light & Wonder’s strategic acquisition of Grover Gaming. This move is seen as a strategically compelling opportunity for LNW to enhance its footprint in the high-margin charitable gaming market, which offers recurring revenue streams. By integrating Grover’s distribution network with its own gaming content, LNW is poised to capitalize on revenue synergies and expand its market presence, aligning well with its long-term growth objectives.
Additionally, Grover Gaming’s impressive financial performance, including a strong revenue growth and a high EBITDA margin, makes the acquisition highly accretive for LNW. The transaction, funded through cash and debt, maintains LNW’s net leverage within its targeted range, suggesting financial prudence. The potential for market expansion, particularly in underpenetrated states, and the synergy between LNW’s content and Grover’s devices are expected to drive substantial growth, reinforcing Hickey’s confidence in a Buy rating.