Lottery Corporation Ltd (ASX: TLC) shares have been a decent investment in recent months. At present, the lottery and Keno provider is sitting on a year-to-date gain of 8.73% over 2025 thus far. That comes in just ahead of the broader S&P/ASX 200 Index (ASX: XJO), which has returned 7.69% over the same period.
Over the past 12 months, Lottery Corp shares have pretty much matched the ASX 200 as well, with both up around 7%.
Lottery Corp would have fared a lot better if not for a rough couple of months, though. Back in mid-September, this ASX 200 stock was minting new record highs, topping out at a round $6 a share on 17 September. However, since then, the company has fallen more than 9%.
Perhaps investors re-read the company's final results from August and decided they weren't as rosy as they first thought. After all, those showed Lottery Corp's revenue down 6.2% and profits down 11.2%.
The company did up its dividend by 3.1% to a fully franked 16.5 cents per share, though.
So, many investors might be looking at this dip in the Lottery Corp share price and wondering whether it represents a buying opportunity. After all, there is arguably a lot to like about this defensive stock, as Lottery Corp holds exclusive, decades-long licenses to run lotteries and Keno in most Australian states and territories.
Luckily for those investors, analysts at Macquarie have been running the ruler over Lottery Corp shares.
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Are Lottery Corp shares a buy or a sell?
Well, it seems Macquarie's analysts are having a bob each way. They have maintained the 'neutral' rating they slapped on the gaming stock back in August (which was down from 'outperform' at the time). However, analysts did downgrade Macquarie's 12-month share price target on Lottery Corporation shares, moving it from $5.50 a share to $5.40.
Given the shares are (at the time of writing) $5.43, that doesn't imply that anything interesting is in store for investors anytime soon.
Macquarie's hesitation on Lottery Corp stems mainly from what it predicts will be sluggish growth going forward, given "weaker than usual" recent jackpot activity. Previously, the investment bank had forecast a 9% growth rate in Australian lotteries. But Macquarie has revised that to an expected 4% growth rate.
Analysts also note that growth opportunities and share buyback prospects are limited, given "Lottery Corp is already paying out around 100% of earnings, and it does not have excess franking credits". Even so, it is forecast that Lottery Corp will pay an increased 17 cents per share in dividends over FY2026, rising to 20 cents over FY2027 and 21.5 cents in FY2028.
Macquarie also highlights the value of this kind of business to certain investors, stating that "Australian lotteries have shown resilience over a long period of time with low sensitivity to economic growth, illustrated by the +4% volume CAGR over the past 25 years".
At the current Lottery Corp share price, this ASX 200 stock is trading on a dividend yield of 3.04%
