Morningstar sees Tabcorp's profitability jump on licence win, raises PT

Tabcorp Holdings

19/12/2023 20:41

** Morningstar says Australian racing and wagering giant
Tabcorp's  TAH.AX  Victorian wagering retail licence win's terms
are better than expected 
    ** Lifts FY25 underlying EBITDA forecast, the first year the
new licence begins, by A$112 mln to A$560 mln ($378.39 mln)
    ** Brokerage hikes fair value estimate for TAH by 5% to
A$1.15 per share
    ** Says deal is a win for TAH, with no joint venture
partner, 20 years of exclusivity and no industry funding
obligations
    ** However, brokerage lowers FY24 EBITDA forecast by 3% to
A$360 mln, says softer wagering activity and higher competition
are weighing on the near term 
    ** Morningstar continues to think TAH's retail channels are
in structural decline
    ** Six of 10 analysts rate the stock "buy" or higher and
four "hold"; their median PT is A$1.05 – LSEG data
    ** Stock has fallen 20% this year, as of last close


($1 = 1.4799 Australian dollars)

 (Reporting by Neha Soni in Bengaluru)
 ((Neha.Soni@thomsonreuters.com))