Light & Wonder (ASX:LNW) posted better-than-expected second quarter results, driven by strong margins at its SciPlay business and lower corporate costs, Jefferies said in a note on Wednesday.
The investment firm said the biggest uncertainty remains game sales, with the company guiding for Q3 game sales of 8,500-9,000 units, about 15% below consensus.
Jefferies forecasts fiscal 2026 unit sales to decline 7%, while a strong year-end pipeline in Australia and New Zealand and supportive market conditions in the US could drive a recovery in Q4.
The brokerage said it is encouraged by the management's focus on reducing leverage, along with continued improvements in earnings quality.
Jefferies maintained a buy rating and price target of AU$145.