Lottery's (ASX:TLC) fiscal 2026 results and guidance were generally in line with expectations amid continued progress on growing its retail share and driving new products, Jefferies said in a Wednesday note.

The company's earnings before interest and taxes of AU$622 million fell just short of consensus forecasts due to weaker lotteries sales, partially offset by margins driven by digital penetration, the investment firm said.

Lottery is launching new OzLotto changes in the first half of 2028, including price increases and potential game changes, Jefferies said, adding that "strong digital mix growth in leaner jackpot run is encouraging for jackpot normalization."

While lottery division sales were weaker than consensus forecasts, the equity research firm believes some estimates may not have reflected jackpot headwinds.

Jefferies maintained a hold rating on Lottery with a price target of AU$5.60.