The Aristocrat Leisure Limited (ASX: ALL) share price is falling with the market on Tuesday.
In afternoon trade, the ASX 200 gaming technology share is down almost 2.5% to $37.40.
Should you snap up this ASX 200 technology share after today's decline?
According to a note out of Goldman Sachs this morning, the broker believes that investors should be buying Aristocrat's shares.
Goldman has been looking at recent industry data and believes it supports its current estimates. It said:
The Sensor Tower app revenue data for Pixel United noted marginal improvement vs. the trend in the prior month while RAID remained a disappointment. Overall, revenue is in line with GSe for 2H23 driven by the strong performance of Social casinos and other games.
For the month of April, both land based and iGaming revenue in the US flagged strong growth, remaining 23% above pre-COVID levels for land-based in Clark County and iGaming continuing the near 100% CAGR 4 year growth in line with trends over the recent months.
All in all, the broker sees this "data update as largely in line with expectations."
What returns could be on offer with Aristocrat's shares?
Goldman Sachs has this ASX 200 tech share on its coveted conviction list with a buy rating and $46.70 price target.
Based on the current Aristocrat share price, this implies potential upside of almost 25% for investors over the next 12 months. The broker concludes:
We believe ALL offers the most diversified growth opportunity within the gaming space, flagging ongoing strength in land-based, significant opportunities in the iGaming market and with the market maintaining an overly bearish view on the longer term outlook for mobile gaming. Our forecasts imply c. 9.8% CAGR NPAT growth for the group over FY22-25e and the stock currently trades at c. 17x P/E on an FY24 basis. We make no changes to our outlook on ALL and reiterate our Buy rating (on CL) with a 12m Target Price of A$46.70.
