Tabcorp Holdings Limited (ASX: TAH)

TAH is an Australian gambling and entertainment corporation. It operates in two segments: wagering and media, and gaming services. The Wagering and Media section provides totalizator and fixed odds betting, retail wagering networks, and worldwide racing media enterprises.

Recommendation Rationale – SELL at AUD 0.770

• Financial Highlights: TAH’s other income decreased to AUD 3.3mn in 1HFY25 vs AUD 12.8mn in 1HFY24. The company’s operating expense increased by 12.2% YoY to AUD 354.2mn in 1HFY25 vs AUD 315.8mn in 1HFY24, due to higher advertising, promotions, and employment costs during the period.
• Trading Near the Resistance: TAH stock has surpassed its R2 level recommended on 06 January 2025. Therefore, share price can face resistance at the current levels.
• Overvalued Multiples: On a forward 12-month basis – key trading multiple (Price/Earnings) is higher than median of the Consumer Cyclicals Sector.
• Market Risk: The tightening regulatory environment in wagering and gambling, including higher taxes and compliance costs, poses ongoing risks to Tabcorp’s operations and profitability.

TAH’s Daily Price Chart

Valuation Methodology: EV/Sales Approach (FY June'26E) (Illustrative)

Stock might trade at a slight premium to its peers considering the YoY revenue growth in 1HFY25, effective cost discipline, and outperformance in cash wagering. For conducting the valuation, the following peers have been considered: Ainsworth Game Technology Ltd (ASX: AGI), Helloworld Travel Ltd (ASX: HLO), Star Entertainment Group Ltd (ASX: SGR), and others have been considered.

Considering that the stock has surpassed its R2 level, macroeconomic uncertainty, rally in share price movement, current trading level, and risks associated, the share price can face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 0.770 (as of 10 July 2025, at 3:05 PM AEST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 10 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided have been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 5: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.