Shares in Australian gaming giant Aristocrat Leisure Limited remain undervalued, despite jumping 13% this week on yet another strong set of half-yearly financial results, according to Morningstar.
In a note, analyst Angus Hewitt put a fair value estimate on the company’s shares of around AU$67 compared with AU$51.94 currently – observing that more subdued profit growth than anticipated in 1H26 to AU$794 million was a result of currency fluctuations but that underlying EGM performance was solid.
“We think shares are undervalued, likely caught up in the broader selloff in technology stocks from artificial intelligence disruption concerns,” Hewitt said
“But we think Aristocrat is well positioned with top-performing franchises, proprietary math models and strong regulatory relationships.”
Most importantly, Hewitt said he expects Aristocrat can continue to capture market share in EGMs through “unmatched investment in design and development, ensuring a healthy pipeline of new products and platform enhancements to drive performance, stimulate demand and differentiate from competitors.”
In iGaming, where the company has invested heavily recently to grow its presence in the United States, Hewitt added, “We expect strong growth in iGaming amid a wave of deregulation in the US, with an 81% uplift in revenue by fiscal 2029 to US$801 million.
“But we expect revenue growth to fall short of the company’s fiscal 2029 revenue target of US$1 billion, reflecting the relatively more competitive environment in iGaming, where Aristocrat is yet to carve out a competitive advantage.”
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