Are you on the hunt for some big returns to supercharge your portfolio?
If you are, then the ASX 200 stock in this article could be worth a shout according to analysts at Macquarie Group Ltd (ASX: MQG).
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Which ASX 200 stock?
The stock that Macquarie is tipping as a buy is Light & Wonder Inc. (ASX: LNW).
This ASX 200 stock is a global leader in cross-platform games and entertainment with a focus on poker machines and digital gaming.
Macquarie notes that its shares have come under pressure following the release of its second quarter update. However, it was relatively pleased with the company's performance. It said:
Light & Wonder reported US$352m 2Q25 AEBITDA including Grover, +7% yoy, consistent with MQe (US$353m)/Visible Alpha (US$351m). Assuming Grover contributed US$10m AEBITDA, underlying growth was +4%. During the quarter, free cash flow = US$102m (operating cash flow, less capex and adding back US$73m legal costs) and leverage closed at 3.4x, incl. Grover pro forma. The buy-back program has US$950m left with 3.1m shares purchased in 1H 2025 (US$266m value).
The broker also highlights that its shares look significantly undervalued compared to rival Aristocrat Leisure Ltd (ASX: ALL). It adds:
Light & Wonder expects a sole primary ASX listing by the end of November 2025 and will delist from the NASDAQ. The company will remain domiciled in the US continuing to report quarterly. With Australia set to take price discovery, using Aristocrat as a valuation proxy trading on 26x 12m fwd P/E, Light & Wonder may be worth A$295/sh, 120% upside (vs. 12.5x P/E currently), albeit a valuation discount is likely.
Big return potential
According to the note, the broker has retained its outperform rating on the ASX 200 stock with a trimmed price target of $180.00 (from $188.00).
Based on its current share price of $122.36, this implies potential upside of almost 50% for investors over the next 12 months.
Commenting on its outperform recommendation, the broker said:
It is easy to be cautious on LNW in the near term (i.e., guidance risks, litigation & leverage), but stepping back, we forecast 16% average annual EPSA (FY25-28E) with the stock trading on 12.5x 12m fwd P/E. With price discovery moving to Australia, a re-rate is likely. Retain Outperform.
All in all, this could make it worth considering if you're looking for exposure to this side of the market.
