Macquarie remains bullish as Light & Wonder receives favorable court ruling

Macquarie notes that Light & Wonder released an update regarding the Dragon Train litigation. On February 7, an Australian court ruled in favor of Light & Wonder and denied Aristocrat’s request for an interlocutory injunction. The firm points out that there are approximate 10k Dragon Train units in Australia and there was a growing short thesis that these units could be subject to an injunction, which would put the company’s EBITDA target at risk. However, this court order confirms that these Dragon Train units will not have to be removed from floors in Australia. At its upcoming Investor Day in May, Macquarie expects the company will address its medium-term goals, which it believes could include reiterating the $1.4B 2025 EBITDA target and potentially issuing a 2027 target as well. The firm has an Outperform rating on the shares with a price target of $117.