Light & Wonder Inc: Risk Reward Update

Research evidence excerpt

M

Update

August 5, 2026 09:25 AM GMT

Morgan Stanley Australia Limited+

Light & Wonder Inc | Asia Pacific

Melinda K Baxter

Equity Analyst

Risk Reward Update

What’s Changed

Light & Wonder Inc (LNW.AX)

From

To

Price Target

A$186.00

A$181.00

Bull Case

A$200.00

A$195.00

Base Case

A$186.00

A$181.00

Bear Case

A$100.00

A$95.00

Updated Components

EPS

Bull Base Bear Scenarios

Risk Reward for Light & Wonder Inc (LNW.AX) has been

updated.

Reason for change

We update our estimates following 2Q26 reporting. Our Group AEBITDA estimates

Light & Wonder Inc (LNW.AX, LNW AU)

Australia Gaming | Australia

Stock Rating

Industry View

Price target

Shr price, close (Aug 5, 2026)

52-Week Range

Fiscal Year Ending

EPS (US$)**

Prior EPS (US$)**

Overweight

In-Line

A$181.00

A$118.00

A$193.00-96.79

12/25 12/26e 12/27e 12/28e

5.45

5.12

6.07

5.95

7.91

7.31

9.47

8.80

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

e = Morgan Stanley Research estimates

are cut by an average of 2% across FY26-28e. Underpinning our earnings changes: i)

moderations to Grover net adds to within guidance range. We had previously

assumed more protracted elevated net adds with new market ramp-ups; ii) Gaming

ops fee per day moderated to ~+CPI (~3%); iii) global gaming sales to within

guidance range 8.5-9k in 3Q; iv) increase in our D&A assumptions in line with run

rate; v) cuts to Systems revenue in line with guidance; and vi) adjustments to

interest/tax expense in line with current run rate. We make no adjustments to our

iGaming/Sciplay estimates for FY26.

As a result of our earnings estimate changes, our PT falls to A$181/shr from A$186/

shr. Our DCF falls to A$203 from A$207, and our P/E falls to A$159 from A$164/shr,

with no other changes to valuation methodology. We continue to value LNW on a

50/50 10-year DCF and P/E valuation (15.5x on 12-mth fwd underlying EPSA).

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companies covered in Morgan Stanley Research. As a result,

investors should be aware that the firm may have a conflict of

interest that could affect the objectivity of Morgan Stanley

Research. Investors should consider Morgan Stanley

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