Taking Stock of Lottomatica Group (BIT:LTMC)’s Valuation After Morgan Stanley’s Overweight Upgrade

Morgan Stanley just shifted Lottomatica Group (BIT:LTMC) to Overweight, pointing to Italy's upcoming licensing round, market share opportunities, a recovering PWO platform, and an enhanced buyback program as key drivers for shareholder returns.

See our latest analysis for Lottomatica Group.

That upgrade drops into a backdrop where Lottomatica’s share price has climbed to €21.92 and delivered a hefty year to date share price return of 69.27%, with a 1 year total shareholder return of 73.41%. This signals that momentum has clearly been building as investors warm to its growth and cash return story.

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With earnings growing faster than revenue, a 30% gap to analyst targets and the licensing round still ahead, the key question now is whether Lottomatica remains mispriced upside or if the market already sees tomorrow’s growth today.

Most Popular Narrative Narrative: 23.2% Undervalued

With Lottomatica last closing at €21.92 against a narrative fair value near €28.53, the current share price implies significant upside if the projections play out.

The upcoming consolidation opportunity from Italy's new online concession framework allows Lottomatica to capture an additional 7-10% of the total market share, with 2% already secured through deals, presenting a structural step-up in the company's addressable revenue base and long-term earnings potential.

Read the complete narrative.

Curious what kind of revenue runway and margin reset could justify that gap, and what future earnings multiple ties it all together? Read the complete narrative to uncover the assumptions powering this upside case.

Result: Fair Value of €28.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story could change quickly if Italian regulators tighten the rules or if traditional retail weakness outpaces the expected digital growth offset.

Find out about the key risks to this Lottomatica Group narrative.

Another Lens On Valuation

Step away from fair value models and the picture gets murkier. Lottomatica trades on a price to earnings ratio of 37.8x, far richer than both the European hospitality average at 16.2x and its own fair ratio of 42.5x. Is this a quality premium, or is valuation risk building?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Lottomatica Group Narrative

If you see the numbers differently or prefer digging into the details yourself, you can build a complete view in just minutes: Do it your way.

A great starting point for your Lottomatica Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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