Aristocrat Leisure Limited (ASX:ALL) shares tipped to hit $41.00

The Australian share market may have dropped lower on Wednesday, but that couldn’t stop the Aristocrat Leisure Limited (ASX: ALL) share price from pushing higher once again.

The gaming technology company’s shares finished the day 1.5% higher at $30.98, stretching their 12-month return to an impressive 41%.

Why did Aristocrat Leisure’s shares climb higher?

With no news out of the company, today’s gain is likely to be attributable to a broker note out of Deutsche Bank this morning.

According to the note, the broker has retained its buy rating and lifted the price target on Aristocrat Leisure’s shares to $41.10. This price target implies potential upside of almost 33% over the next 12 months.

Deutsche has become additionally bullish on Aristocrat Leisure after the Australian dollar weakened. As the company generates a significant portion of its revenue internationally, and in the United States in particular, it stands to benefit greatly from favourable currency movements.

Furthermore, the recent appointment of Jeff Karp to the role of managing director of its Big Fish Games business is seen as a big positive. Mr Karp has a strong track record of overseeing the development of popular games such as The Sims, EA Sports franchises, Words With Friends, and Draw Something.

Should you invest?

While there are a lot of growth shares in the tech sector such as Appen Ltd (ASX: APX) and Altium Limited (ASX: ALU) for investors to choose from, I would argue that the risk/reward on offer with Aristocrat Leisure puts it at the top of the list.

Thanks to the success of its core business, its fast-growing digital business, and its strong international earnings, I think Aristocrat Leisure is capable of growing its earnings at a strong rate over the coming years. I feel this makes its shares great value at 24x estimated FY 2019 earnings.

The next Aristocrat Leisure? This ASX small cap is up 285% with no sign of stopping...

One Australian company has developed a state of the art device that's revolutionizing hospitals all over the world. Even better, this device is so profitable that the company rakes in 90% margins. That's a lot of cash. So no wonder the stock's up 285% since 2008 – with no signs of stopping...

To discover the name and code, simply click the link below. You'll discover our expert's #1 medical technology pick... and you can decide for yourself whether to get invested today.

Click here to claim your free report.

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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.