Up 59% in 2024, why this ASX 200 stock is making noise today

Many people naturally think that large-cap companies are too big to post massive earnings. However, this high-yielding ASX 200 stock could put those beliefs to bed.

Aristocrat Leisure Limited (ASX: EVERYTHING) is up 59% year-to-date, demolishing the benchmark’s 8% gain. The gaming beast behind titles like Lightning Link and Dragon Link has given its investors reason to celebrate with such monstrous returns of late.

But today’s show ties into a major development for the company — one that should bolster Aristocrat’s balance sheet.

Shares hit a new 52-week high of $66.10 in morning trade before slipping into the red.

In May, Aristocrat informed shareholders that it would conduct a strategic review of its casual and mid-core gaming assets. These assets are known as free-to-play games and do not require any form of license to offer to customers.

Aristocrat CEO Trevor Croker said at the time that such assets “are not aligned to our core and we continue to review strategic options in the best interests of shareholders.” Instead, management has shown its strong intention to focus on regulate the gambling market — think pokies, online casinos, etc.

Today, the ASX 200 stock revealed the result of this review.

The company’s subsidiary Pixel United has agreed to sell Plarium – known for its mobile games such as Raid: Shadow Legends and Mech Arena – to Modern Times Group for a fixed upfront payment of $620 million, with an additional 200 million USD. achieving the goals from 2025 to 2028.

According to Aristocrat, Plarium has delivered an internal rate of return in the “mid-teens” during its tenure. For context, that of the company return on assets last year it was around 15%, which is relatively solid compared to the industry average of around 5%.

In addition, proceeds from the transaction will go toward Aristocrat’s long-term growth strategy. Cash and cash equivalents stood at $2.66 billion at the end of March. The upfront payment alone could boost the company’s war chest to about $3.5 billion.

Although still subject to closing conditions, the sale is expected to be completed in the first half of next year.

Is this ASX 200 stock still worth buying?

Morgans recently raised its price target for Aristocrat shares to $67 apiece. The broker explained that the iGaming side of the business is performing above expectations. Meanwhile, the Goldman Sachs team has a less bullish $62 price tag with a neutral rating.

According to Commsec, no analyst is willing to label the ASX 200 stock a sell. Out of 11 recommendations, six are strong buys, four are moderate buys and one is a hold.

Aristocrat Leisure shares are currently trading on a price-earnings (P/E) ratio. 28 times FY24 earnings.