Analysts Upgrade Lottomatica Group SpA

Investing.com – Analysts at BTIG have started coverage of Lottomatica Group SpA (BIT:LTMC) with a Buy rating and a target price of €17, approximately 53.4% above the €11.27 per share closing price on October 25.

Before this update, the betting company's stock boasted 11 “Buy” ratings and an average target price of €15.62 per share, showcasing an upside of over 38% from the current value.

Lottomatica's Growth Through Online Betting

According to BTIG, Lottomatica can take advantage of the shift towards online betting. Italy has the largest gambling market in Europe, around €15B, but the lowest online penetration. Only 30% of the business is digital, compared to 60% – 80% in other mature markets.

The advantages of online gaming include higher win rates for players and better economics for operators due to increased frequency and lower taxes. BTIG anticipates the consolidation of the duopoly between Lottomatica and Flutter Entertainment PLC (LON:FLTRF).

Analysts expect the renewal of online gaming concessions in 2025 to bring another 15% of the market towards the two main operators.

Limited Awareness Among US Investors

Despite growth opportunities, Lottomatica shares are priced at a discount, largely due to low awareness among US investors and a low free float (approximately 30% freely traded). However, BTIG sees significant equity returns potential thanks to revisions and multiple expansions.

For 2024, BTIG projects Lottomatica’s revenue at €2.04 billion and EBITDA at €715 million, in line with Visible Alpha's consensus. In 2025, they expect an 11.3% revenue growth and an EBITDA of €838 million.

The key is the development of omnichannel gaming. If Lottomatica can retain customers and digital adoption continues, the shift is deemed favorable, making the bullish scenario more attainable, according to BTIG.