Aristocrat Leisure shares buoyed by Goldman Sachs upgrade
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The news: Shares in Aristocrat Leisure jumped on the ASX after Goldman Sachs upgraded its rating on the poker machine company to 'buy'.
The numbers: Aristocrat shares were up 2.5% to $70.66 by 1:35pm AEDT, having advanced more than 60% over the last 12 months.
Goldman Sachs upgraded Aristocrat to 'buy' from 'neutral' and hiked its target price by 11% from $70 to $78.
The context: Goldman Sachs analysts said they are increasingly confident Aristocrat can grow its market share beyond 40%, driven by the development of high-indexing games ahead of its peers.
They noted that the company's investment in research and development and balance sheet strength has facilitated this, while it has also been bolstered by the successful intellectual property defence of its Dragon Link game last year.
Elsewhere, with Goldman Sachs' global economists seeing "solid disposable income growth" in 2025, the analysts expect this will like support casino expenditure.
They also believe Aristocrat will be returning to its "core competency" of slots content following the proposed sale of its Plarium mobile gaming business in November.
The source: Goldman Sachs research
