Although Light & Wonder executives expressed confidence about penetrating the Brazilian igaming market, “they see themselves entering Alberta first.”
That’s according to Deutsche Bank analyst Carlo Santarelli, who met with leaders of the company last week in Miami. Other international catchment areas Light & Wonder is pondering for slot-based gaming growth are Thailand, Japan, and the United Arab Emirates.
Acknowledging among other factors the effect of the ban on Light & Wonder’s Dragon Train game, Santarelli lowered his price target on LNW stock to $78 a share from $81. He stuck with his Hold rating, however.
Light & Wonder execs were characterized as optimistic. Development of a new Dragon Train iteration was said to be underway at Light & Wonder’s new Reno studio, in addition to “a broad slate of additional titles to fill the void.”
The company expects the 2025 slot-replacement cycle to be similar to this year’s. Santarelli was even more upbeat, believing that Light & Wonder’s current offerings could drive increased market share, even without Dragon Train.
“Despite the headwind in Australia from the Dragon Train lawsuit, we believe LNW remains well positioned to garner market share in the 30% range, which is down from the Dragon Train-fueled ~40% share, though still healthy,” the analyst wrote.
Light & Wonder acknowledged some headwinds in social gaming, where it’s looking to further monetize its players. The latter currently spend $1.04 per day on the site, compared to the competition’s average of $1.50
Live-dealer games were perceived to be progressing in the igaming sphere. The company’s market-leading position as a vendor of Internet slot games was seen as another cause for optimism.
“The direct-to-consumer platform has been rolling out gradually to certain spend per user cohorts, with the low hanging fruit largely plucked, but management noted there is still room to grow,” Santarelli chronicled. He thought Light & Wonder would continue to penetrate with direct-to-consumer products but that its digital progress would decelerate.
The analyst deemed Light & Wonder’s balance sheet to be in good condition, giving the company the flexibility to engage in merger or purchase activities. That being said, “Any M&A on the horizon would be bolt on and relatively modest.”
