Don't look now but the Aristocrat Leisure Limited (ASX: ALL) share price is making another dash higher today.
Shares in the gaming machine and app developer jumped a further 3.8% to a more than one-month high of $35.02 in after lunch trade.
The gain comes on top of its 6.7% surge yesterday after management released its half year results and announced a $500 million on-market share buyback.
Aristocrat share price gets another lift from bullish brokers
The Aristocrat share price appears to be getting a second wind as brokers gave the thumbs-up to the results and reiterated their buy recommendation on the shares.
These positive developments come after Aristocrat tanked 23% over the past six months. That's a 20% underperformance to the S&P/ASX 200 Index (ASX: XJO).
Earnings beat
The group's interim net profit after tax and amortisation from acquisitions (NPATA) jumped 40% to $580 million.
That was ahead of UBS' forecast of $507 million, but that isn't the only thing that impressed the broker. UBS noted that Aristocrat's gaming machine business in the Americas is winning market share.
UBS rates the Aristocrat share price as a buy with a 12-month price target of $44.80 a share.
High quality result
Goldman Sachs is another broker that was impressed. The group's first half earnings and sales came in 5% to 6% ahead of its expectations.
The broker said:
Compositionally, the result was strong, with better-than-expected performances across the board, particularly across North American land based which came in 12% higher than our above consensus segment profit forecasts.
Digital presents big upside for the Aristocrat share price
Further, Aristocrat's digital business is also delivering. This offsets the recent weak mobile bookings data that had been dragging on the Aristocrat share price.
The analysts at Macquarie Group Ltd (ASX: MQG) think there is a big upside from Aristocrat's plans to launch iGaming in North America before the end of this year. It has two major customers lined up and has the opportunity to scale the business in what is believed to be a US$30 billion market in 2030.
Macquarie commented:
We take the view that Aristocrat has a strong opportunity for success, considering its market leading slot content, land-based customer relationships and the ability to tuck-in additional capability and product suites through M&A.
As context, we see an opportunity for Aristocrat to deliver A$6.00/sh upside under a bull-case scenario but for now include A$3.50/sh in our target price.
Both Goldman Sachs and Macquarie are recommending the Aristocrat share price as a buy. Goldman's 12-month price target on the shares is $43 while Macquarie's target is $44 a share.
