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06 Feb, 2024 10:42 06 Feb, 2024 10:42

Jefferies names Flutter as top gaming pick

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Flutter EntertainmentSharecast graphic / Josh White

Jefferies has named Flutter Entertainment as its top UK pick in the European gaming sector but has also named London-listed peers 888 Holdings, Entain and Playtech as 'buys'.

In a research report on Tuesday, the broker said it remains positive on the whole European gaming sector for four key reasons.

"1) Online channel growth and increased online penetration provide insulation from macro trends; 2) regulatory headwinds should ease; 3) the US profitability ramp now begins; 4) M&A remains dynamic - recent deals highlight a valuation disconnect to public markets, especially in Europe," Jefferies said.

As for Flutter, the broker its recent move to a US primary listing has created a "short-term catalyst path" with the company's "continued market dominance despite an increasingly competitive backdrop." It has a 19,500p target price for the UK-listed shares, which implies 18% upside on current levels.

"Consequent comparison with US-listed, high growth, digital peers shows a material valuation disconnect: 16.6x EV/EBITDA versus 18% compound EBITDA growth contrasts with peers on materially higher multiples."


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Important Legal Notice about News Sources

Pilling and Co Stockbrokers Ltd. is not responsible for the content or accuracy of third party news articles and we may not share the views of the author or publisher.

We provide third party news for your convenience and information only and make no representation or endorsement whatsoever and hereby exclude all liability for any loss or damage that may be incurred by you as a result of your access or use. Please note that third party content may be subject to terms and conditions imposed by the third party owner of that content.

The value of investments can fall and you may get back less than you invested.