Aristocrat Leisure Ltd

ALL: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$98.00	Kznbtxh	Bvxydzpfg

Digital Gaming and Leased Machines Spare Aristocrat the Worst

Angus Hewitt

Nov 19, 2020

We maintain our AUD 33.00 fair value estimate for shares in narrow-moat Aristocrat following the release of its fiscal 2020 financial result. Fiscal 2020 was a difficult year for Aristocrat, with underlying net profit dropping 47% to AUD 477 million--but ahead of our AUD 451 million forecast. As expected, earnings weakness was principally due to Aristocrat's outright electronic gaming machine, or EGM, sales which have been hard-hit as coronavirus-induced shutdowns, social distancing measures, and travel restrictions weighed on the firm's casino and club customers.

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