The Aristocrat Leisure Limited (ASX: ALL) share price will be on watch today after the gaming technology company was the subject of a positive broker note out of Goldman Sachs.
At the time of writing the company's shares are flat at $31.73.
What was in the note?
According to the note, the broker has revised its earnings estimates higher after accounting for favourable currency movements.
With approximately two-thirds of the company's sales and segment profits generated in U.S. dollars, the recent depreciation of the Australian dollar versus the greenback is being seen as a major tailwind for Aristocrat Leisure.
As such, the broker has lifted its earnings per share forecasts for the next three years. In FY 2018 Goldman expects earnings per share to come in at 124.2 cents, before rising to 152.5 cents in FY 2019 and 177.4 cents in FY 2020.
In light of this upwards revision, the broker has lifted its price target on the company's shares from $34.10 to $35.30. This price target implies potential upside of around 11% based on its last close price, meaning Goldman has kept its shares on their conviction buy list.
Goldman isn't the only broker that has tipped Aristocrat Leisure as a buy this month. In fact, some brokers are even more bullish.
So far in July no less than three other brokers have retained their buy ratings on its shares.
According to notes released earlier this month, Credit Suisse has an outperform rating and $35.00 price target, UBS has a buy rating and $36.20 price target, and Deutsche Bank has a buy rating and lofty $41.10 price target.
Should you invest?
I agree with all four brokers that Aristocrat Leisure is a buy right now.
Especially how many of the best growth shares on the local market such as Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX) are trading on sky-high earnings multiples, whereas Aristocrat Leisure's shares are priced at a modest 20x estimated FY 2019 earnings.
I think this makes its shares great value for its current growth profile which is being underpinned by its fast-growing digital business.
