Aristocrat's Pre-Reported Earnings Overshadowed by Playtech Interlopers

We maintain our AUD 36.00 fair value estimate for shares in narrow-moat Aristocrat following the release of fiscal 2021 results. Underlying net profit of AUD 865 million--81% higher than the prior corresponding period--was virtually pre-reported. Please see our note published Oct. 19, 2021: "Corporate Action: Aristocrat's Renounceable Rights Give Investors an Each-Way Bet." The result was overshadowed by two potential suitors circling Playtech since the announcement of Aristocrat's bid, including Playtech's second-largest shareholder Gopher Investments (with a stake of about 5%). But no formal competing bids have been made, and the Aristocrat board continues to expect the acquisition to complete during the first half of calendar 2022.