In Brief: Light & Wonder, Playside Studios, Latrobe Magnesium

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This story features LIGHT & WONDER INC, and other companies.
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The company is included in ASX50, ASX100, ASX200, ASX300 and ALL-ORDS

This week's In Brief looks at two gaming stocks poised for a re-rating and a burgeoning manganese producer to plug a critical mineral supply chain risk.

• Light & Wonder may deliver softer 1Q, but no doubt surrounds the 2026 outlook
• PlaySide’s Mouse launch impresses with strong early sales and reviews
• Latrobe Magnesium positioned to capitalise on critical minerals supply gap with ESG benefits

By Danielle Ecuyer

This week’s quote comes from Shane Oliver, AMP:

“The upcoming Budget is an ideal opportunity to reframe government policy to put the economy onto a stronger path. The latest global crisis adds to the case for this.

“The five key things the Budget needs to do are: limit any “cost-of-living” relief; cut government spending over four years; undertake serious tax reform and not just tax hikes; big productivity reforms like less red tape & more incentives to invest; and reform the Charter of Budget Honesty.”

Light & Wonder on a solid growth trajectory

As has already been highlighted by FNArena’s editor, quarterly earnings results and guidance updates are proving to be a veritable minefield for investors.

Which has Jarden highlighting this week that Light & Wonder’s ((LNW)) upcoming 1Q2026 earnings update –scheduled for May 7– could come in on the “soft” side based on “guided and buy-side expectations”, the latter being institutional investors.

The analyst’s March quarter earnings (AEBITDA) are some -5% below consensus due to expected gaming segment earnings (AEBITDA) coming in lower by -$11m, resulting from guided margins at circa 50% versus the 54% achieved in the previous quarter.

A second factor is unallocated corporate costs of -$7m arising from higher investment in AI.

All-in-all these two factors equate to an EPS estimate which sits -12% below consensus at US$1.37 against the market at US$1.57.

While Jarden is erring on the conservative side for the March quarter, the broker stresses US gross gaming revenue trends remain “resilient”, with the replacement cycle intact and the recently acquired charitable gaming assets from Grover, Indiana ramping up.

Positively, the gaming company is noted as leading the North American market in new gaming operations with a 47% market share of the top-performing new premium units.

Jarden argues demand has remained resilient even with potential macro headwinds and uncertainty.

The sell-down in the shares from a high in January around $180 to $125 currently, and a low of sub-$125, is seen as an opportunity, with the stock now viewed as “oversold” on the AI disruption debate.

Based on the AI threat narrative and ascribing a zero valuation for Light & Wonder’s iGaming and Social Casino, the stock is trading around 17x times FY27 land-based gaming earnings.

Jarden sees the company generating double-digit EPS growth, with a CAGR of 18% over FY24-FY28, while trading at a discounted valuation to larger competitor Aristocrat Leisure ((ALL)), and believes supportive trends will emerge from Grover against current “conservative” install estimates.

Earnings (AEBITDA) margins are anticipated to normalise to 70%-plus post the impact of investment costs in 2H2026.

The North American regulatory environment is also expected to become more favourable as states seek to capitalise on taxation revenue from what the analyst describes as “unregulated grey markets”.

Jarden retains a Buy rating with a slightly lower target of $190 from $199.

Playside looks to be onto a winner with Mouse P.I. for Hire

Continuing on the topic of gaming, Canaccord Genuity provided an early update on the launch of PlaySide Studio’s ((PLY)) largest original IP title, Mouse P.I. for Hire.

As highlighted prior in FNArena’s Treasure Chest “Playside Studio’s Release”, April 13 (https://fnarena.com/index.php/2026/04/13/treasure-chest-playside-studios-mouse-release/), analyst were upbeat on the title’s launch.

The Canaccord analyst now confirms some 48 hours post launch, robust Steam and PlayStation review scores have been retained, with Mouse maintaining its fourth global Steam top-seller ranking with promising ongoing wishlist activity.

Mouse has received a 96% positive review score on Steam, and a 4.6/5 rating on the PlayStation store.

Management has confirmed unit sales of around 360k as at April 20, 7am, of which some 47k are pre-sales. Net revenue of $9m across all platforms was also noted.

Notably, the robust sales align with gaming titles typically reflecting a skew to “front-loading” the revenue curve, in other words, new titles experience the highest revenue in the initial weeks.

Normally, the first week represents the greatest bulk of sales, circa 25%-35% of the first year’s gross revenue, according to GameDiscoverCo data, which aligns with results for premium-priced games with over 90% review scores.

In the case of Mouse, the analyst assumes around 25%-35% of its estimated circa 1.3m Steam launch wishlists convert in week one, with a blended average selling price per unit of circa $47, which equates to around $9m-$18m in net revenue in the first week.

This can grow to circa $11m-$23m in the first month post launch, and some $28m-$55m for the first year.

This estimate excludes any possible revenue from consoles such as PlayStation, Xbox and Nintendo.

The broker is currently forecasting a base case revenue of $28m, which could prove conservative based on initial Mouse’s review scores and top-seller rankings.

Importantly, PlaySide can recover all publishing and marketing-related costs upfront, estimated between -$10m to -$11m, due to the circa 60% net revenue margin.

Looking ahead, the analyst believes the successful execution of Mouse will underwrite the potential to pursue publishing deals for the existing pipeline of original IP over the next year, including Dumb Ways to Party and Game of Thrones: War for Westeros.

The stock is rated Buy with an unchanged 60c target price.

Latrobe Magnesium working to solve a critical mineral challenge

Shaw and Partners initiated coverage of Latrobe Magnesium ((LMG)), which is verging on becoming Australia’s first magnesium producer, considered “vital” to offer western demand an alternative supplier to Chinese sources.

Currently, China and Russia control 95% of global production of magnesium, with magnesium the lightest structural metal and an essential input for industrial and defence sectors because of its “exceptional strength-to-weight ratio”, the analyst highlights.

It also has an essential role in aluminium alloying.

Western nations have classified magnesium as a critical mineral for their economies, with end-use markets including EV lightweighting, aerospace, missile systems, and more.

In 2001, prices rose over 200% when China stopped production, which has incentivised allied production. Shaw points to expected doubling in global demand in the next two to three years, noting a “vacuum” of US production.

A global structural deficit is expected to remain.

Latrobe Magnesium is using a CSIRO-developed and patented process to convert industrial fly ash into the metal, and its main asset is in the Latrobe Valley, with management aiming for substantial scaling of production to 10,000tpa by 2027/28, with the current demonstration scale at 1,000tpa.

The broker highlights the technology can convert 100% of industrial waste, brown coal fly ash and ferro-nickel slag tailings into magnesium metal. The process can achieve a reduction in CO2 emissions of -60% against the existing global industry average.

Management’s strategy is transitioning the current demonstration plant (stage one) to a 10,000tpa commercial facility (stage two), with a 30-year operational life.

Stage three is an international mega plant targeting 100ktpa.

From a fiscal perspective, Latrobe has achieved a strategic Letter of Interest from the US Ex-Im Bank, as well as support from Export Finance Australia for a US$200m construction debt facility to fund stage two.

The analyst estimates earnings (EBITDA) of $65m from a 10ktpa base.

The stock is Buy rated (High risk) with a 6c target price.

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