Light & Wonder Inc (AU) **Sigh** play

Research evidence excerpt

J P M O R G A N

Asia Pacific Equity Research

05 August 2026

Light & Wonder Inc (AU)

**Sigh** play

Overweight

LNW.AX, LNW AU

Price (05 Aug 26):A$118.00

Price Target (Dec-26):A$138.00

Although headline expectations were met, the following should be considered: 1)

When normalised for the full- quarter Grover contribution, underlying revenue

was down -0.6% and the acceleration in Gaming Ops FPD was driven largely by

a favorable unit mix shift. 2) With Grover now fully annualised in the base,

execution risk will build into 2H given the strong 4Q skew and outright sales

required to achieve guidance. 3) FCF outcomes and lower buybacks through the

balance of FY26 will drive de-gearing towards 3.0x. At these levels, we think

current multiples imply that risk/reward is skewed to the upside. Retain

Overweight, $138 PT.

Judging 2Q. AEBITDA was delivered on limited top-line growth, in fact,

when normalising for the uplift from a full quarterly Grover contribution (~US

$20m) 2Q26 revenue was flat. Of course, the acceleration in Gaming Ops FPD

was supported by unit mix shift (lower non-premium install base). The

earnings growth/beat came via cost-out (stronger Sciplay margins/lower

corporate costs), and for a product-led business we do not see this as a

sustainable strategy for the stock to re-rate.

Comps are tough crust. Grover will now be wholly reflected in the base,

hence, organic growth is required from here to achieve guidance. 4Q26

outright sales carry the highest execution risk to delivering FY26 guidance.

Recall, 4Q25 saw 12.3k outright sales, which included 7k N.A. units. This was

boosted by a sizeable SSBT order, Canadian VLT units and Asian timing

benefits. 3Q26 appears more manageable, noting the pcp included ~3.6k

outright sales units from Entain despite Asian sales being light. JPM is

factoring in 8.9k/11.8k outright sales for 3Q/4Q.

2 Huff Skew? Our US$1,531m AEBITDA (+6% y/y) sits towards the bottom

end of management’s M-HSD guidance for FY26 and incorporates 2% top-line

growth. Consistent with guidance, our earnings have a 2H skew and are highly

contingent on execution of high 4Q outright sales expectations despite cycling

a strong comp.…