Aristocrat Leisure will acquire Playtech in order to enter the real money gambling market. The acquisition implies an enterprise value of $5bn.
UBS observes the acquisition allows the established European business to make an immediate contribution while the US operations ramp up.
The broker forecasts net profit of $1.2bn and $1.4bn in FY22 and FY23, respectively as Playtech is incorporated into estimates. Buy rating retained. Target is raised to $55.00 from $44.40.
Sector: Consumer Services.
Target price is $55.00.Current Price is $45.79. Difference: $9.21 – (brackets indicate current price is over target). If ALL meets the UBS target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
