Aristocrat's North American Business Drives Fiscal 2019 Earnings Growth

We raise our fair value estimate for Aristocrat Leisure by 6% to AUD 27.50 per share following the annual results. This increase is driven by strong North American performance, a lower effective tax rate moving forward, and the effects from the time value of money. Fiscal 2019 normalised net profit after tax and before amortisation of acquired intangibles, or NPATA, of AUD 894 million was in line with our AUD 890 million estimate--a 23% increase on fiscal 2018. The poker machine manufacturer enjoyed another strong year in North America, with growth in market share and yield. Aristocrat’s competitive advantages in the key North American market underpin the firm's narrow economic moat. We expect continued market share gains in North America to drive a low double-digit NPATA CAGR over the five years to fiscal 2024.