The US casino gaming sector continues to strengthen as gaming revenues enjoy year-on-year growth.
This is good news for two ASX-listed gaming stocks: Aristocrat Leisure Ltd (ASX: ALL) and Light & Wonder Inc (ASX: LNW).
Aristocrat shares are currently trading at $62.98, up 2.42%. The stock is up 40% over the year.
The Australian gambling machine manufacturer's stock has experienced a shaky few months. Between the end of February this year and early April, the share price slumped 26.21% to a low of $57.93.
Light & Wonder shares are currently trading for $131.29, up 2.35%, and down more than 9% on the year.
The cross-platform global games company's shares suffered a similar fate to Aristocrat over the past few months. The share price also dropped quickly in March and early April, shedding 32.21% to a low of $122.13.
But despite the sell-off, analysts at Macquarie Group Ltd (ASX: MQG) maintain a positive position on the two stocks and expect prices to recover over the next year.
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What does Macquarie expect?
In a recent note to investors, the broker confirmed its outperform rating on Aristocrat and Light & Wonder shares.
But it expects a significantly higher upside from one of them.
Macquarie has maintained its $70 price target on Aristocrat shares, which represents a potential 11% upside on the stock's current price.
For Light & Wonder, the broker has also maintained its $187 12-month price target. This represents a potential 42% upside from current trading prices.
The broker said US casino gaming revenues remain resilient despite macroeconomic uncertainty after Liberation Day tariffs were announced in April 2025.
"Looking forward, we expect US casino gaming revenues to remain relatively insulated from any potential economic downturn given the historically low correlation to US GDP," the note said.
"Overall, we continue to be constructive on Aristocrat and Light & Wonder, with the backdrop supportive for North America outright volumes (indirectly via operator budgets) and Gaming Ops (directly via US casino gaming revenue trends)."
Target price risks
As always, Macquarie's ratings and target price face some element of risk.
For Aristocrat, the broker notes that macroeconomic volatility might impact gaming revenues at licensed venues. It also points to depth and breadth of product, underlying performance, and increased competition from other gaming businesses.
The stock's outperform rating could also be affected by investor sentiment around future merger & acquisition, as well as gambling regulation.
Light & Wonder's share price and outperform rating could be affected by slower gaming revenues and outright sales businesses. Again, Maquarie also points to depth and breadth of product, underlying performance, competitor improvements, and gambling regulation.
