JP Morgan raises Aristocrat’s 2027 adjusted EBITDA forecast by nearly 4pct

Investment bank JP Morgan has raised its forecast for Aristocrat Leisure Ltd’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) for the financial year ending September 30, 2027, by 3.7 percent, to nearly AUD2.86 billion (US$1.94 billion). The institution expects a larger installed base of gaming machines and faster revenue growth at Aristocrat Interactive to support group earnings. Aristocrat’s three main segments are gaming, including casino slot machine equipment; Product Madness, for social gaming products; and interactive – covering gaming systems, iLottery, iGaming and sports, iGaming white-label, and content and aggregation. The revised estimate implies an 8.8-percent increase from the reported AUD2.64 billion in adjusted EBITDA for the financial year ended September 30, 2026. The brokerage also raised its forecast for 2027 net profit after tax and before amortisation (NPATA) by 2.6 percent, to AUD1.73 billion, following the Australian gaming supplier’s full-year results published on Thursday. JP Morgan analysts Don Carducci, George Stewart and Louis Loader said in a Thursday memo that Aristocrat Gaming would benefit from a full year of earnings from machines installed during the previous financial year. The gaming supplier added about 6,500 units to its North American gaming operations installed base in the 12 months to September 30, 2026. Both the net additions and the average daily fee of US$53.93 per unit exceeded the brokerage’s expectations. JP Morgan expects new cabinets and titles, including additions to the “Monopoly” range, to support further installations. At Aristocrat Interactive, the analysts expect growth from wider distribution of online casino content, expansion of iLottery contracts and greater use of the division’s platforms. The institution estimated that Aristocrat’s share of the U.S. online slot market more than doubled between June and September, reaching about 8.0 percent. The analysts cited the planned online launch of the “Dragon Link” title in early 2027 as one of the developments that could help the segment move towards its US$1 billion revenue target for the financial year ending September 2029. At Product Madness, Aristocrat’s social casino business, JP Morgan noted that margins rose above 50.0 percent as direct-to-consumer sales reached 30.0 percent of social casino revenue. The brokerage said however that group cash conversion weakened in the year to September 30. Gross operating cash flow as a share of EBITDA fell to 85.0 percent from 94.0 percent a year earlier, as higher inventories and receivables tied up working capital. The recovery of AUD45 million in legal costs related to Light & Wonder Inc partly offset that impact, the analysts said. Aristocrat said on Thursday it had named Dafne Guisard as chief executive-elect, subject to required regulatory approvals. She is due to succeed Trevor Croker, who intends to retire in April 2027.