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Light & Wonder's Key Catalysts are Deleveraging, Earnings Certainty, Jefferies Says

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Light & Wonder's (ASX:LNW) two key catalysts are deleveraging and earnings certainty, Jefferies said in a note on Monday.

The investment firm pointed to sequential ramp-up in game sales and game release timing as the driver of second-half adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) growth re-acceleration. Jefferies forecasts second quarter group AEBITDA of AU$363 million, acknowledging headwinds in the SciPlay and social markets.

The firm's recent fiscal year 2026 guidance reiteration of mid-single-digit to high-single-digit percentage growth in AEBITDA is a positive, but achieving high-single-digit percentage growth will be difficult in the absence of a material improvement in social games.

The firm can re-accelerate AEBITDA growth to high-single-digit percentage growth from fiscal 2027 and onwards, given the ongoing ramp-up of the Gaming Ops profile over the fiscal year.

The investment firm assigned a buy rating to Light & Wonder and a price target of AU$145 per share.

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