Aristocrat Leisure Ltd (ASX: ALL) shares have slipped into the red on Friday afternoon. At the time of writing, the share price is 0.24% lower at $63.68 a piece. The shares have fallen 8.45% in October and are now just 3.51% higher than this time last year.
There has been no price-sensitive news out of the company recently to explain the share price drop. It appears that the downturn may be a mild pullback from investors seeking to cash in on previous gains, rather than a long-term shift.
Brokers at Macquarie Group Ltd (ASX: MQG) think there is more room for the shares to rise. In a recent note to investors, the broker confirmed its outperform rating on the stock. It also has a $75 per share target price.
At the time of writing, this translates to a potential 17.8% upside for investors over the next 12 months.
"US casino gaming revenues remain resilient, with September's weakness largely driven by Labor Day timing, and multiple US operators including Caesars, Red Rock Resorts, and MGM Resorts speaking to improving trends in the 4Q25," the broker said in its investor note.
"In particular, Caesar's Entertainment, which operates both Las Vegas Strip and regional casinos noted in Las Vegas "we see trends improving sequentially," whilst noting "demand in regional is pretty solid." Overall, we remain constructive on both Aristocrat and Light & Wonder, validated by our recent learnings in the US (report link) – the industry backdrop supports both the Gaming Operations segments (variable revenue machines), and outright volumes via operator budgets."
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What does the broker have to say about the US casino industry?
Macquarie reviewed US casino gaming revenue trends in September 2025. This is based on data from 26 jurisdictions covering nearly all commercial casinos.
Overall, it found that gaming revenues were flat year on year at US$4.1 billion.
"We think this is likely driven by Labor Day weekend partly falling in August this year, with combined August/September growth still up 3% yoy – US operator Caesars Entertainment also noted this impact. 2025 YTD is +2% yoy," Macquarie said.
Regional gaming revenue (85% of volumes) was up 1% year on year, but Las Vegas was down 5% year on year.
What else does Macquarie have to say about Aristocrat Leisure shares?
Macquarie said that Aristocrat can continue to win market share, supported by industry-leading design and development spending.
The gaming stock's share price is also supported by legalisation of iGaming and iLottery expands, Aristocrat's TAM, and the trajectory to generate US$1bn Interactive revenues in FY29.
"Aristocrat has balance sheet optionality, supported by more than A$1.6bn annual free cash flow (operating cashflow less capex) and should return to net cash in FY26, inclusive of our assumptions of A $750m annual share buybacks, which provides ongoing M&A potential Þ Aristocrat," Macquarie added.
On the downside, the broker notes that its ratings and outlook on the shares could be impacted by slower consumer spending. This could be through lower casino outright purchases or Gaming Ops revenues. The share price is also at risk from a continual decline in social casino industry revenues.
"Future profitability is dependent on Aristocrat's ability to direct volumes through its higher margin direct-to consumer platform….Key competitors, Light & Wonder and IGT have / are undergoing major restructures, and in time may become more competitive, impacting Aristocrat's growth, and….Aristocrat has seen departures of key management in recent years, and there is a debate whether this is an attrition or cultural issue," the broker said.
