Jumbo Interactive (ASX:JIN) remains positioned for further upside despite fiscal year 2026 earnings being weighed by historically weak jackpot activity, with fiscal year 2027 guidance expected to be the next major catalyst, Jarden said in a Thursday note.
Jarden said the company's updated fiscal year 2026 guidance modestly exceeded its forecasts but came in slightly below consensus estimates, which it believes had overestimated lottery retail transaction volumes due to weaker-than-expected jackpot outcomes.
The research firm estimates weak fiscal year 2026 jackpots reduced Australian lottery sales by AU$600 million to AU$700 million, suggesting the company's normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) and earnings would have been about 10% and 12% higher, respectively.
The research firm noted that the company's international prize draw business is gaining momentum, with upgraded US EBITDA guidance on faster draw cadence and steady economics, while the UK outlook was cut due to higher costs, not weaker demand.
Jarden believes investor focus remains on the company's 2030 reseller agreement renewal with Lottery (ASX:TLC), but views non-renewal as unlikely despite assuming net commission falls to 1.65% in its base case.
It views the fiscal year 2027 guidance, expected on Aug. 27, as the next major catalyst and continues to project around 29% EBITDA growth.
Jarden maintained an overweight rating on Jumbo Interactive while raising its price target to AU$10.80 from AU$10.50.