Tabcorp’s gambling offerings are materially impacted by pub/club closures, the broker notes. Lottery ticket impact at newsagents is unclear in the lockdown. Can racing (80% of wagering) continue with everything else suspended? How much offset can be gleaned from increased online activity?
These questions lead the broker to cut near term earnings its target to $4.60 from $5.40, while noting the balance sheet is solid and Tabcorp’s underperformance of the index would quickly reverse at the first sign of restrictions being lifted. Buy retained on a look-through.
Sector: Consumer Services.
Target price is $4.60.Current Price is $3.00. Difference: $1.60 – (brackets indicate current price is over target). If TAH meets the UBS target it will return approximately 35% (excluding dividends, fees and charges – negative figures indicate an expected loss).
