Light & Wonder (ASX:LNW) is set to deliver a stronger second-quarter earnings performance, supported by robust game operations growth, stable SciPlay revenue with improved margins, continued iGaming expansion, and initial contributions from Grover Gaming, while maintaining full-year guidance amid potential litigation updates, Jarden said in a Tuesday note.

Jarden sees the company poised for double-digit adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) growth, trading at a discount to peers like Aristocrat, with rerate catalysts including hitting its $1.4 billion AEBITDA target, resolving litigation, and reviewing its listing status.

Downside risks include economic or gaming slowdowns, restrictive regulations or litigation, talent loss, increased iGaming competition, market share declines, slower machine churn, and adverse Dragon Train litigation outcomes, Jarden said

Upside risks include stronger land-based share gains, higher SciPlay average revenue per daily active user and direct-to-consumer growth, favorable gaming operations mix, better iGaming market openings, improved litigation outcomes, and positive index weighting changes, Jarden added.

The investment firm maintained Light and Wonder's buy rating while shaving its price target to AU$188 from AU$189.