Why it isn’t too late to buy Aristocrat Leisure Limited shares

The Aristocrat Leisure Limited (ASX: ALL) share price has pushed higher again on Friday and is up 1% to $23.44 in morning trade.

This means the gaming technology company’s shares have now risen an impressive 52% since this time last year.

Is it too late to buy Aristocrat Leisure shares?

I don’t think it is. Even after its incredible run higher over the last 12 months Aristocrat Leisure’s shares are changing hands at a reasonable 30x trailing earnings.

While this is obviously a premium over the market average, I don’t think it is at all unreasonable for the level of growth it has been exhibiting.

Over the last five years the company has grown its earnings at an average of 47.5% per annum. I expect similarly strong growth this year thanks to its recent acquisitions, U.S. tax cuts, and the continued success of its fast-growing digital segment.

I’m not alone in this view either. In fact, one leading broker is even more bullish on Aristocrat Leisure than I am.

According to a note out of Citi this morning, the broker has revised its earnings forecasts to reflect the strong performance of its North American businesses and the positive impact of U.S. tax cuts.

Citi expects the company to achieve underlying earnings per share of approximately $1.08 this year, up almost 40% on FY 2017’s 77.5 cents. After which, in FY 2019 the broker expects earnings per share to grow 28% to approximately $1.38.

This has led Citi to retain its buy recommendation and increase the price target on its shares from $28.90 to $31.50. This price target implies potential upside of 34% for its shares over the next 12 months.

All in all, I believe Aristocrat Leisure is up there with the likes of Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) as one of the best growth shares to buy on the market right now.

Finally, here are three more growth shares that I think are in the buy zone today.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Altium and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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