Aristocrat Leisure's NeoGames takeover has strategic value - brokerages

NeoGames SA

16/05/2023 03:38

(Updates with comments from Morgan Stanley and share price
moves)
    ** Aristocrat Leisure's  ALL.AX  $1 bln deal for online
gaming solutions provider NeoGames SA  NGMS.O  has clear
strategic value for the co as it supports its ambitions for
global scale and capability - Jefferies
    ** Analysts at Jefferies raise price target on the
Australian co's stock to A$39.36 from A$35.25 over positive M&A
news and strong earnings momentum
    ** Shares down as much as 1.7% to A$38.84, posting their
biggest intraday fall since May 5 
    ** Brokerage Citi says deal allows ALL to market complete
solutions to casino partners across its own content, aggregation
of third-party titles and player account management
    ** Citi adds that NeoGames deal accelerates financial
contribution of real-money gaming (RMG) strategy and dilutes the
impact of a slower digital market
    ** Both brokerages expect ALL to report strong first half
results on May 18, driven by strength in the land segment 
    ** Morgan Stanley says acquisition supports an increase in
medium- to long-term growth for ALL
    ** MS, however, sees deal to be marginally accretive to EPS
in FY25
    ** As of last close, stock up 29.5% this year


 (Reporting by Navya Mittal and Himanshi Akhand in Bengaluru)
 ((Himanshi.Akhand@thomsonreuters.com;))