Melinda Baxter, an analyst from Morgan Stanley, maintained the Buy rating on Aristocrat Leisure Limited (ARLUF – Research Report). The associated price target was raised to A$75.00.
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Melinda Baxter’s rating is based on several strategic developments and projections for Aristocrat Leisure Limited. The company has recently completed a strategic review, which included the sale of Plarium and retention of Big Fish, positioning it to update the market on its capital management strategy. This strategic positioning has resulted in an estimated A$3.5-6.0 billion in excess capital, allowing for potential initiatives such as share buybacks or special dividends.
Additionally, the shift in the company’s earnings profile towards a higher proportion of recurring income supports a potential increase in its payout ratio. The potential scenarios considered suggest varying stock price increases, with the base case scenario including a new share buyback program. These factors collectively contribute to the optimism reflected in the Buy rating, highlighting potential for stock appreciation.
In another report released on February 9, Bell Potter also maintained a Buy rating on the stock with a A$83.00 price target.