Tabcorp is facing a challenging year, cycling a fortunate run of lottery jackpots amid wagering retail venue closures and an uncertain outlook for sports betting.
Hence, Citi assesses an underlying decline in operating earnings (EBITDA) of -14% in FY20. Earnings are expected to recover by FY22 but the stock requires further industry consolidation for material upside.
Hence, the broker reinstates coverage with a Sell rating and $2.80 target.
Sector: Consumer Services.
Target price is $2.80.Current Price is $3.20. Difference: ($0.40) – (brackets indicate current price is over target). If TAH meets the Citi target it will return approximately -14% (excluding dividends, fees and charges – negative figures indicate an expected loss).