Embarking on a robust start at the year’s onset, shares of Flutter Entertainment rose by a notable 13.77%. However, amidst a bearish shift over the past six months, the gaming equity’s journey has seen a reversal of fortunes. Amidst these market conditions, one analyst posits that the recent downturn has been excessively pessimistic, signaling brighter days and buoyant triggers awaiting the stock on the horizon.
At the helm of the enterprise, Flutter CEO Peter Jackson steers the ship through tumultuous tides. An optimistic view from the financial sector suggests that this recent setback in the stock’s performance is nothing but a temporary eclipse, and that a resurgence could be imminent.
Early in the week, Joseph Thomas, an astute analyst from HSBC, advised clients to maintain a steadfast position, bestowing upon the FanDuel parent a “buy” recommendation. Thomas’s insights forecast a tempting 25% uptick from the stock’s present valuation. He underlines an enticing proposition, where Flutter is projected to trade at an appealing 16 times its estimated 2025 enterprise value/earnings before interest, taxes, depreciation, and amortization (EV/EBITDA), complemented by a free cash flow yield standing at 7%.
The reasonable assessment doesn’t mirror an entity that’s been overestimated, according to Thomas, especially for a conglomerate poised to continue its growth trajectory while navigating through some isolated adversities.
Australia’s temperate performance, currency fluctuations, an unusually favorable phase for gamblers in the last quarter, and a series of regulatory and taxation challenges in the UK are a few of the discrete glitches Flutter encounters. Rivals in the field are also grappling with Australian market issues and UK’s regulatory regime.
Headquartered in Dublin, Flutter not only commands substantial influence in UK and European betting landscapes but has notably shifted its narrative to the United States through a substantial 95% stake in FanDuel. Along with DraftKings, FanDuel emerges as a towering force in the US online sports betting duopoly and is forging ahead in the country’s iGaming sphere. Exiting the third quarter, FanDuel boasted a 40% slice of the US online sports wagering market, a dimming from 42% from the year prior, but its iGaming share swelled to 23% from 19%. On this momentum, Flutter sets its eyes on a share listing on the New York Stock Exchange (NYSE) in the nascent phase of 2024.
This revelation isn’t ground-breaking; the investing world has been privy to this information. Yet Thomas accentuates that a significant portion of Flutter’s enterprise value is tethered to its US division, which outperforms other markets in growth.
Significantly, FanDuel is on track to notch up annual profitability this year, which would crown it the first US internet sportsbook operator to achieve such a mark. Thomas contends that should FanDuel merely meet its forecasts, it could be enough to catalyze Flutter’s stock.
Although the NYSE listing has been in the blueprint for close to a year, the fruition of this venture could yield substantial benefits for the stock. Currently, Flutter’s shares make their home in the over-the-counter (OTC) marketplace, which restricts the avenues available for fund managers to acquire the stock, and retail investors often forgo OTC stocks in favor of those on principal exchanges.
Transitioning from a broader financial narrative, we consider the cultural impacts of online gaming and casinos. With its diversifying product offerings and strategic market positioning, a company like Flutter Entertainment exemplifies the dynamic evolution of the online betting and casino industry. For those in Canada looking to engage with top-tier online gaming platforms, we’ve researched and assembled a list of the leading online casinos for the current month. Whether you’re a seasoned player or new to the virtual casino floor, our curated selection at the West Island Blog promises to deliver exceptional experiences, responsible play, and the excitement of a real casino, all from the comfort of your home. Join us in exploring the best that online casinos have to offer.