Retail improvement might represent a material value realization opportunity for Tabcorp Holdings (ASX:TAH) over the medium term, Jefferies said in a Monday note.

Demonstrated improvement in racing conditions should see Tabcorp re-rate, given market expectations for a structural decline in racing. However, no material retail uplift in the first half of 2026 is expected due to the absence of a material license restructure in New South Wales.

Bookmaker margins in Victoria were 11.7% from July 1 to Nov. 8, a material decline from 15.5% in the prior corresponding period, per the note. Turnover trend was better, which suggests structural growth in racing, and the 2025 Spring Carnival represented the first spring with turnover growth since the Covid-19 pandemic.

The investment firm maintained a buy recommendation on Tabcorp and a price target of AU$1.07 per share.