"FDJ is now trading at a premium to the broader gaming space despite lower earning growth potential," wrote Goldman Sachs, adding it expected margin upside to the guidance.
In July, the European Commission said it had opened an investigation into the granting of exclusive rights for lottery games to La Francaise des Jeux (FDJ) for 25 years.
FDJ shares were down 2.1% in early session trading. The stock is still up about 13% year to date, and have gained over 87% since a November 2019 IPO.
"We think current news flow on the EU investigation into the French government granting exclusive rights to FDJ...highlights a different risk profile for FDJ," added Goldman.
(Reporting by Dominique Vidalon and Juliette Portala; Editing by Sudip Kar-Gupta)