UBS has initiated coverage of The Lottery Corp post its demerger from Tabcorp ((TAH)), describing "a unique asset, ready to re-rate", as one of the few listed lottery operators globally.

The stock offers long-dated licences, a strong domestic market position with high barriers to entry, control over key demand levers, and low capital intensity, the broker notes.

Lottery Corp is growing its online business well above the historical rate, which being to some extent covid-driven will abate in pace, UBS suggests, but penetration will remain ongoing for a digital business 3x more priftable than retail.

Initiate with Buy and a $5.40 target.

Sector: Consumer Services.

Target price is $5.40.Current Price is $4.40. Difference: $1.00 - (brackets indicate current price is over target). If TLC meets the UBS target it will return approximately 19% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2022 Acquisdata Pty Ltd., source FN Arena