TTS – UBS rates the stock as Neutral

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Target $2.75 (was $2.50). The latest guidance from Tatts has come in higher than the broker’s forecasts, with UBS thinking a strong performance from the group’s lotteries business has been boosted by a favorable jackpot run over the 2H.

FY12-13 forecasts and the price target are lifted in response.

The broker really likes the group’s strong underlying cashflows, a monopolistic and steady earning lotteries business and other defensive characteristics. However, UBS also thinks the stock is too expensive and so maintains its Neutral call.

Sector: Consumer Services.

Target price is $2.75.Current Price is $2.84. Difference: ($0.09) – (brackets indicate current price is over target). If TTS meets the UBS target it will return approximately -3% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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