On Monday, Redburn-Atlantic initiated coverage on Lottomatica Group Spa (LTMC:IM) with a Neutral rating and a price target set at €12.45. The firm's analysis acknowledged Lottomatica's position as a dominant player in the Italian market, noting its continued market share growth due to increased online penetration and strategic mergers and acquisitions.
The firm pointed out that Lottomatica's earnings are receiving a boost from these developments. However, it also highlighted that the market has already accounted for these positive factors. As a result, the valuation discount of Lottomatica, compared to its more geographically diversified competitors, is deemed appropriate by Redburn-Atlantic.
Furthermore, the firm expressed concerns over the risks associated with Lottomatica's focus on the Italian market. It also mentioned the potential influence of the investment firm Apollo on Lottomatica's valuation, suggesting that it could limit the upside of the company's stock price.
The price target of €12.45 reflects the firm's stance on Lottomatica's current market position and its prospects. Redburn-Atlantic's neutral outlook indicates a balanced view of the potential risks and rewards associated with investing in Lottomatica shares at this time.
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