A large number of analysts are excited about the ASX blue-chip share Aristocrat Leisure Ltd (ASX: ALL). It may not be the most well-known business out there, but it actually has a market capitalisation of $43.8 billion, according to the ASX, making it one of the largest non-bank and non-mining businesses on the ASX.
As the chart below shows, it has already driven significant returns for shareholders, rising by more than 150% in the past five years.
Analysts from UBS describe this business as a developer and manufacturer of slot machines in the world. That's why it has such a large market capitalisation. It has a "strong presence" in the North American market. Other core markets for slot machine sales include Australia, Asia, and Latin America. It also operates online 'social casinos', offering its content through Facebook, Apple, and Android.
But, despite reaching the size that it has, there is widespread optimism among investment professionals that the business has a lot more to offer.
Let's take a look at why there are at least 14 analysts, according to Commsec, who rate this ASX blue-chip share as a buy, including UBS.
Why investors are bullish on Aristocrat Leisure shares
I'll refer to commentary from broker UBS about the business and its valuation.
The broker noted that the FY25 half-year result from a few months ago "disappointed" compared to analyst expectations, but UBS didn't think the fundamentals had changed.
UBS still thinks the company will grow at a double-digit rate, suggesting underlying earnings per share (EPS) could grow at a compound annual growth rate (CAGR) of 11% between FY25 and FY30.
This expected growth is underpinned by "a high-quality core gaming franchise" that UBS expects will gain market share over the medium term. Scalable growth in its 'interactive' division, as well as capital being deployed or returned to investors, will accompany this growth.
The broker forecasts Aristocrat Leisure could generate $2.84 of earnings per share (EPS) in FY26, putting the ASX blue-chip share at 25x FY26's forecast profit. UBS is projecting the company's net profit could increase from $1.54 billion in FY25 to $2.2 billion in FY29.
