Gaming business ALL is not a favourite of ethical funds but has rallied solidly through 2023, retracing over 50% of its 2021/22 decline. Earlier in the year the company expanded its buyback by $500mn and proposed the $US1.2bn acquisition of NeoGames which received overwhelming shareholder backing in July. ALL continues to fulfil its goal of accelerating its online gaming plans through M&A but revenue of $3.08bn did marginally disappoint in May causing a minor dip in the share price. However, our biggest issue with the stock is its strong correlation to tech indices which have surged since Q4 of 2022 but as we see this advance maturing we can see ALL struggling above $41.
The company enjoyed over 43% of its revenue from the US in 2022 and they further grew US revenue by 17% in the 6 months to March 31st but this alone doesn’t warrant chasing the stock above $41.
- We like ALL as a business but see limited upside above $41 taking into account external influences.
MM is neutral ALL around $41
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