Lottomatica shines with acceleration on 500 million buyback plan

(Il Sole 24 Ore Radiocor)- Lottomatica Group archived the declines following the accounts and is among the best stocks on Milan's Ftse Mib in the wake of updates on the 500 million buyback plan.

The market welcomed the details on the timing of the company's buyback plan. The group is ready to buy back its own shares up to 300 million within this year. So far, Lottomatica explains, the purchases have amounted to around 130 million out of a total of 500 million approved under the buyback programme launched on 18 June. Therefore, the company holds a total of 5,849,784 treasury shares, equal to 2.325% of the outstanding ordinary shares. Lottomatica plans to buy back an additional 170 million shares by the end of 2025, "in order to benefit from the current share price" and then 200 million in 2026.

The news is 'positive', say analysts at Intermonte, also 'in light of the recent weakness of the stock, which in our view was unjustified'. For the experts, 'the intention to purchase up to EUR 170 million in treasury shares by the end of the year can be a supportive element for the stock with an impact on average daily volumes over the last three months of between 20% and 25% (compared to around 7% since June)', remaining within the company's stated targets. Equita on the other hand points out that around 800,000 shares have been bought back in the last week. "The acceleration of the buy-back," writes the stockbroker, "is a clear sign of management's confidence in the group's prospects and the opportunity offered by the recent share price correction. Analysts also remain 'confident', given 'management's track record', despite 'concerns about possible M&A transactions abroad' that may have dampened the stock in recent sessions. In addition, they state that visibility on estimates is "well supported by market trends" and that, for the moment, the "regulatory uncertainties that have impacted some foreign markets such as France and the UK" do not seem to be emerging in Italy.

For Barclays, which reaffirms its Overweight rating for Lottomatica with a target price of EUR 26, "the updated buyback programme should help provide better visibility on near-term capital allocation priorities"". In particular, 'it seems to suggest that any significant M&A transaction is unlikely in the short term', a prospect that reduces the perplexity that emerged among investors after the Group's results.