If you have space in your portfolio for a new addition, then it could be worth considering Jumbo Interactive Ltd (ASX: JIN).
That's the view of analysts at Bell Potter, which are feeling positive about the ASX 300 stock.
What is the broker saying about this ASX 300 stock?
According to a note released this morning, Bell Potter acknowledges that jackpot activity remains subdued but has strengthened in recent months. It said:
Powerball and Oz Lotto jackpot activity has strengthened since our initiation in November 2024 following accelerated jackpot sequencing by The Lottery Corporation (TLC, not rated), however, remains below normalised levels and well below jackpot levels in 1H24. Aggregate jackpots ≥$15m totalled $810m in 1H25 down 19% on 1H24 and 5% below normalised levels, suggesting a YoY decline for Lottery Retailing Total Transaction Value (TTV) in 1H25 (BPe -3% YoY to $240m).
Online lottery ticket channels tend to underperform retail channels when there is subdued jackpot activity suggesting digital penetration growth in 1H25 may be slower than the historical trend (BPe 40.5% digital penetration in 1H25 vs. 42.0% in 2H24).
In addition, it highlights that the second half could also be tough given how strong the prior corresponding was. It adds:
A record $1,365m in aggregate Powerball and Oz Lotto jackpots ≥$15m was recorded in 2H24 which included the record-breaking $200m Powerball, the largest jackpot in Australian lottery history. Jackpot activity in 2H25 would need to be 38% above normalised levels to remain flat on 2H24, suggesting negative PcP growth is likely. We forecast FY25 aggregate jackpots of $1,640m culminating in Lottery Retailing TTV of $496m and revenue of $114m, 1% below VA consensus.
Nevertheless, the broker sees a lot of value in the company's shares despite the above.
Time to buy
The note reveals that Bell Potter has retained its buy rating and $16.50 price target on the ASX 300 stock. Based on its current share price of $13.26, this implies potential upside of 24% for investors over the next 12 months.
In addition, it is forecasting a fully franked 3.6% dividend yield in FY 2025, boosting the total potential return to almost 28%.
Commenting on its buy rating, the broker said:
We maintain our Buy rating. We believe the market has priced in negative earnings growth for FY25 following a record FY24 for Lottery Retailing TTV. JIN trades at a historically low 10x NTM EV/EBITDA and 19x P/E. We believe this presents an attractive opportunity to gain exposure to the global lottery digital penetration thematic. Our buy thesis is also supported by the recession-resilient nature of lottery ticket sales and potential upside from government and charity SaaS contract wins.
