If you are looking for a combination of major upside and an attractive dividend yield (who isn't?), then it could be worth considering the ASX All Ords stock in this article.
That's because the team at Macquarie Group Ltd (ASX: MQG) believes that it could be dirt cheap at current levels.
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Which ASX All Ords stock?
The stock that Macquarie is bullish on is Jumbo Interactive Ltd (ASX: JIN).
It is a digital lottery specialist, providing lottery software platforms and lottery management expertise to the charity and government lottery sectors in Australia and globally. It also operates the Oz Lotteries and Powered by Jumbo brands.
Macquarie notes that jackpot activity has picked up recently after a tough period. It also reiterates its belief that the company will return to growth in FY 2026. It said:
Australian lottery jackpot activity picked up in June, with Oz Lotto peaking at A$70m and Powerball hitting A$100m. Based on our tracker and scenarios, we see FY25E volumes dropping 9% (vs. 7.5% drop previously) – this is reflected in our forecasts. Overall, we see jackpot games down 16% while base games +3%.
Importantly for digital volumes, key games should see sequential growth (+9%), and as such, we expect improved digital penetration sequentially (2H25 = +1%pts to 41.5%). Our FY26E lottery volumes are unchanged on an absolute basis, and imply 11.5% growth (+17% digital volumes); key drivers are jackpot normalisation, Saturday Lotto pricing and underlying growth.
Major upside potential
The broker highlights that the ASX All Ords stock "has materially de-rated since the 1H25 result, impacted by market-share losses within Australian lottery retailing."
It feels this has been overdone and created a buying opportunity for investors. Macquarie points out that "improving market share should be a re-rating catalyst, and supports our above-consensus forecasts for FY26E+."
In light of this, the broker has reaffirmed its outperform rating on Jumbo's shares with a $13.90 price target. Based on its current share price of $9.61, this implies potential upside of approximately 45% for investors over the next 12 months.
In addition, the broker is forecasting dividend yields of 5.3% in FY 2025 and then 6.6% in FY 2026., which boosts the total potential 12-month return to over 50%.
Commenting on its outperform rating for the ASX All Ords stock, the broker said:
Jumbo is trading at a 45% P/E discount to the ASX 300 Industrials, its widest since 2017, following a significant de-rate at the 1H25 result, whereby earnings were impacted by jackpot activity (which will normalise) and market share losses, which if reversed, will be a key re-rating catalyst.
