JIN – Morgans rates the stock as Add

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The company’s trading update significantly exceeded Morgans’ expectations. The broker believes the company is high-quality and upgrades forecasts substantially. Transaction value in FY19 is expected to grow 44%.

Operating leverage is being illustrated, with EBITDA growth of 66.5%. The company has signed the Mater Foundation to use its recently launched lottery platform. Powered By Jumbo is a new revenue channel which the broker suggests has highly attractive economics.

Morgans expects returns to shareholders to be forthcoming in the form of special dividends and maintains an Add rating. Target is raised to $10.70 from $6.31.

Sector: Consumer Services.

Target price is $10.70.Current Price is $8.05. Difference: $2.65 – (brackets indicate current price is over target). If JIN meets the Morgans target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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