Light & Wonder Inc (ASX: LNW) is a global cross-platform gaming company that designs and supplies physical casino machines, social/mobile games through SciPlay, and digital (iGaming) content and platforms.
At the time of writing, shares are trading at $128.71 each for this consumer discretionary company.
It has had a rough 12 months, seeing its stock price fall 16.80% during that span.
However, according to Broker Bell Potter, Light & Wonder shares could be a buy low option.
The broker has a 12 month price target of $194.00, indicating an upside of 50.72%.
Here's what the broker had to say.
Renewed optimism
According to the report, Bell Potter expects Light & Wonder's cross-platform strategy and leading scale will produce a portfolio of high-performing games in both land-based and digital markets.
LNW's games portfolio leads the Top NEW Premium Leased & WAP (PLW) rankings with 45% share of top-ranking units, a positive indicator for nearterm install base net adds.
The broker said it expects improvement in product quality will strengthen Light & Wonder's competitive advantage, supporting market share gains.
It also noted the current valuation looks attractive compared to key competitor Aristocrat Leisure Ltd (ASX: ALL).
At 10x NTM EV/EBIT(A), LNW trades at a ~47% discount to ALL.
Not all smooth sailing
The broker did note the potential impact of several litigation and arbitration claims, which may incur costs to defend or settle and result in judgements against the company.
On June 23, 2025, the U.S. District Court for Nevada heard a motion from Aristocrat Leisure seeking to compel Light & Wonder to hand over the final math models for all Light & Wonder Hold & Spin games developed since June 2021.
A ruling in favour of Aristocrat Leisure, would require Light & Wonder to provide these models to Aristocrat Leisures external lawyers.
This move could potentially expose any further misappropriation of trade secrets by Light & Wonder.
Foolish takeaway
Despite the legal action, Bell Potter remains optimistic on the short term returns of Light & Wonder shares.
We point to litigation uncertainty as a key near-term risk, and don't expect a meaningful re-rate in LNW shares until litigation issues are resolved in 2026 at the earliest. We prefer LNW to ALL over the medium term given the valuation discount.
Macquarie is also optimistic on the potential growth of Light & Wonder.
It has an outperform rating and $188.00 price target on its shares.
