Ainsworth Game appears likely to return to profitability in FY22 and Macquarie notes material operating leverage from improved volumes.
The broker believes slot products suppliers should be through the worst of the pandemic now, as most casinos around the world have reopened. The broker now forecasts a -$22m pre-tax loss in FY21.
Ainsworth should gain from opportunities in North America, with Kentucky Historical Horse Racing turnover at 30% above pre-pandemic levels.
The MTD Gaming acquisition should also deliver incremental sales, supported by an exclusive year deal with Golden Gaming in Montana. Macquarie upgrades to Outperform from Neutral and raises the target to $0.65 from $0.45.
Sector: Consumer Services.
Target price is $0.65.Current Price is $0.42. Difference: $0.23 – (brackets indicate current price is over target). If AGI meets the Macquarie target it will return approximately 35% (excluding dividends, fees and charges – negative figures indicate an expected loss).
