The Aristocrat Leisure Ltd (ASX: ALL) share price could have plenty of room to climb higher from current levels.
That's the view of analysts at Goldman Sachs, which have recently reiterated their conviction buy rating on the ASX 100 share.
This follows the release of the gaming technology company's half-year results last week.
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What is Goldman saying about this ASX 100 share?
According to the note, the broker has retained its buy rating on its shares with an improved price target of $46.70.
Based on the current Aristocrat share price of $38.50, this implies potential upside of 21% for investors over the next 12 months.
Goldman highlights that the ASX 100 share reported a half-year result in line with expectations despite a soft performance from its digital business. Overall, it has seen enough to believe that its buy thesis remains intact. It commented:
1H23 results were in line with our expectations with mixed reads across various divisions. While the market reaction to this update was weak, which we believe to be largely driven by Pixel United, the update offers incremental support to our Buy thesis.
One of the highlights was the company's new Anaxi real money gaming business. The broker explained:
The update from Anaxi was another key positive in our view. While management has not provided any financial target expectations for this business over the next couple of years, Anaxi has also signed FanDuel as a content distribution partner, resulting in access to c. 55% of the market. We continue to view this as the strongest growth opportunity for ALL, which has especially been enhanced by the proposed NeoGames acquisition.
The sum of the above is that Goldman is now forecasting a double-digit annual earnings per share growth rate from this ASX 100 share through to FY 2025. It concludes:
Overall, we revise the segment profit outlook by 2-3% over FY23-25e and our 12m Target Price by +2.2%. ALL currently trades at 17x FY24 P/E while offering 12% CAGR EPS growth over FY22-25e. We maintain our Buy (On CL) rating.
