On Thursday, JPMorgan issued an updated analysis on Tabcorp Holdings (TAH:AU) (OTC: TABCF) shares, reducing the price target to AUD0.56 from AUD0.67, while keeping an Underweight rating on the stock. The revision reflects the firm's view on persistent industry challenges that could affect the company's performance.
The analyst noted that despite a decrease in Tabcorp's share price, there are still risks looming due to the unfavorable conditions within the industry. Competitors' feedback has also hinted at a potentially overly optimistic market consensus.
JPMorgan's revised projections suggest that even with an expected boost from the Victorian license, which could contribute approximately A$100 million through the fiscal year 2025, Tabcorp's Wagering EBITDA is not anticipated to grow year-on-year when comparing FY25 with FY24.
The firm's updated forecasts position them at the lower end of Bloomberg consensus estimates. Despite trading below the average range seen after the company's demerger and before the TTS merger—less than 5 times FY24 enterprise value to EBITDA and about 3.5 times for FY25—the analyst believes the current discount in Tabcorp's valuation is warranted given the ongoing market conditions. This assessment underscores the challenges Tabcorp faces within a competitive and evolving industry landscape.
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