The Lottery Corporation Limited (ASX:TLC) has just released its annual results: This is what analysts think

The annual results for The Lottery Company Limited (ASX:TLC) earnings were released last week, which makes it a good time to revisit the company's performance. Lottery reported revenues of AU$4.0 billion, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of AU$0.19 beat expectations, coming in 2.4% higher than analysts' expectations. Analysts typically update their forecasts with each earnings report, and we can judge from their estimates whether their opinion of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts' latest (statutory) forecasts following next year's earnings announcement.

Check out our latest analysis for Lottery

Following last week's earnings report, the Lottery's 15 analysts are forecasting revenues of AU$3.94 billion in 2025, roughly in line with the past 12 months. Statutory earnings per share are expected to decline 5.4% to AU$0.18 over the same period. However, prior to the release of the latest results, analysts had been expecting revenues of AU$3.96 billion and earnings per share (EPS) of AU$0.18 in 2025. So it looks like overall sentiment has softened slightly following the latest results – there were no major changes to revenue estimates, but analysts have made minor downward revisions to their earnings per share forecasts.

It may be surprising to see that the consensus price target remained largely unchanged at AU$5.34, with analysts making it clear that the forecast earnings hit is not expected to have a major impact on the valuation. The consensus price target is simply an average of individual analysts' targets, so it might be helpful to see how wide the range of underlying estimates is. Currently, the most optimistic analyst values ​​Lottery at AU$6.00 per share, while the most pessimistic values ​​it at AU$4.50. This is a very narrow range of estimates, which either means Lottery is an easy company to value, or – more likely – that the analysts are relying heavily on a few key assumptions.

We can also look at these estimates in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether the forecasts are more or less optimistic compared to other companies in the industry. We'd like to highlight that revenue trends are expected to reverse, with a forecast decline of 1.3% on an annual basis by the end of 2025. This is a notable change from the historical growth of 6.6% over the past five years. In contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to grow revenues at 6.5% per year for the foreseeable future. So while revenues are forecast to decline, this cloud has no silver lining – the lottery sector is expected to underperform the wider industry.

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The conclusion

The biggest concern is that analysts have been cutting their earnings per share estimates, suggesting that Lottery may be facing business difficulties. On the positive side, there have been no major changes to revenue estimates, although forecasts suggest it will underperform the wider industry. The consensus price target remained stable at AU$5.34, with the latest estimates not enough to have an impact on price targets.

With that in mind, we still believe the long-term trajectory of the company is much more important to investors. At Simply Wall St, we have a full range of analyst estimates for Lotteries out to 2027, and you can see them free on our platform here.

However, one should always think about the risks. A typical example: We have 2 warning signs for lottery You should be aware.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.