If you are hunting big returns for your investment portfolio, then it could pay to listen to what analysts at Macquarie Group Ltd (ASX: MQG) are saying about one ASX 200 stock.
That's because the broker believes that its shares could rise almost 50% from where they trade today.
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Which ASX 200 stock?
The stock that Macquarie is urging investors to buy is Light & Wonder Inc. (ASX: LNW).
It is a global leader in cross-platform games and entertainment. The company highlights that it brings together approximately 6,000 employees from six continents to connect content between land-based and digital channels "with unmatched technology and distribution."
The team at Macquarie remains very positive on the company after running the rule over its acquisition of Grover Gaming. The broker points out that the deal gives the ASX 200 stock access to an attractive and growing ePull Tabs market. It said:
The acquisition of Grover Gaming provides a foothold in North American ePull Tabs, an attractive industry with revenues above US$1.1bn in 2024, net of prizes, generated from the 11 licensed states. There are four main competitors, with Grover the second-largest.
Grover has 10k ePull Tab machines, with around 60% market share in its five operational states. Commercialization is via Gaming Ops, whereby Grover provides the machines and receives a revenue share from the venues. We see three key drivers, forecasting US$196m 2028 Grover EBITDA, implying +15% four-year CAGR to 2028 and which may be conservative versus recent trends (2024 = +34% growth yoy).
Big returns
In light of the above, the broker has become more even positive on the ASX 200 stock. This has seen its analysts reaffirm their outperform rating and lift the price target on its shares to $188.00,
Based on its current share price $127.64, this implies potential upside of 47% for investors over the next 12 months.
Commenting on its buy recommendation for the ASX 200 stock, the broker concludes:
Light & Wonder is setup to deliver +9.5% average annual adjusted EBITDA growth over three-years to hit the 2028 US$2bn target, albeit it is a touch above our forecast growth (+8.5%). A re-rating is likely, via momentum towards targets, litigation outcomes, and an eventual ASX primary listing.
All in all, this could make Light & Wonder one to consider if you have space in your portfolio for a growth share or two right now.
