This report is an updated version of the report published on 26 May 2025 at 1:25 PM AEST.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corporation Ltd (ASX: TLC) is an ASX listed lottery and Keno operator. It operates iconic brands such as The Lott and Keno, delivering a diverse portfolio of games including Powerball, Oz Lotto, TattsLotto, and Keno across all Australian states and territories, excluding Western Australia.

Recommendation Rationale - SELL at AUD 5.380

• Surpassed Resistance: TLC has surpassed the ‘Resistance 1’ level recommended on 1 April 2025. Therefore, TLC can face resistance at the current levels. Moreover, the stock is near its 52-week high, implying limited immediate upside and potential for price consolidation or pullback.
• Revenue and Profit Decline: Group revenue decreased by 5.6% YoY to AU$1,779.2 million compared to the prior period, and net profit after tax (NPAT) fell 9.9% YoY to AU$175.7 million before significant items.
• Keno Digital Turnover Decline: While retail turnover for Keno grew 5.6% YoY, digital turnover declined sharply by 17.5% YoY in H1 FY25, offsetting retail gains and causing EBIT to decrease 8.9% YoY in H1 FY25.
• Balance Sheet and Leverage: Total liabilities increased to AU$4,127.8 million as of 31 December December 2024 from AU$4,001.1 million as of 30 June 2024, with interest-bearing liabilities rising to AU$2,622.6 million, indicating higher leverage and potential financial risk.

Daily Price Chart

Daily Technical Chart, Data Source: REFINITIV

Valuation Methodology: Price/Cash Flow Approach (FY Jun'26E) (Illustrative)

TLC is expected to trade at a slight premium to its peers considering the diversified game portfolio, consistent fully franked dividends (8.0 cents per share in H1 FY25), and planned product innovations. For conducting valuation, the following peers have been considered: Aristocrat Leisure Ltd (ASX: ALL), Breville Group Ltd (ASX: BRG), and JB Hi-Fi Ltd (ASX: JBH).

Considering the rally in share price movement, current trading level, and risks associated, the share price can witness resistance at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 5.380, as of 26 May 2025, at 12:50 PM AEST.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 26 May 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.    

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 5: Dividend Yield may vary as per the stock price movement. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 7 May act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 7 May act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.