Benchmark has reiterated its Buy rating on Flutter Entertainment (NYSE: FLUT) with a steadfast price target of $265.
The firm's confidence is bolstered by the recent meeting with Flutter's CEO Peter Jackson and Group Director of IR, Paul Tymms, at the Global Gaming Expo (G2E).
The discussions at the expo highlighted Flutter's strong positioning for expansion in the U.S. and North American markets.
Flutter Entertainment is recognized for its innovative approach to product development, which Benchmark believes will continue to set the company apart in the industry. The company's generosity program, which offers additional value to customers, is seen as a competitive advantage that is difficult for rivals to replicate.
Despite a recent drop in Flutter's stock value by nearly 9% on Friday, following speculations of an increase in taxes on online gaming in the UK, Benchmark views the current situation as an advantageous entry point for investors. The firm anticipates that the tax implications will be less severe than speculated, which underpins their reiteration of the Buy rating and the $265 price target.
In other recent news, Flutter Entertainment has been making significant strides. The company reported a 20% increase in Q2 revenue to $3,611 million and a 17% rise in adjusted EBITDA to £738 million. Furthermore, Flutter Entertainment confirmed its acquisition of Italian gaming operator Snaitech S.p.A. for approximately €2.3 billion ($2.53 billion), expected to finalize in Q2 2025.
Analyst firms have responded favorably to these developments. Barclays maintained an Overweight rating and a price target of $275, citing the company's strategic diversification of revenue streams.
Susquehanna raised its price target for Flutter Entertainment, highlighting the company's growth potential and pending acquisitions in Italy and Brazil. Craig-Hallum and Oppenheimer also increased their price targets to $275 and $300 respectively, maintaining positive ratings on the stock.
In addition to these developments, Flutter Entertainment has disclosed a regulatory filing for a block listing application for its ordinary shares and an update on its total voting rights.
InvestingPro Insights
Flutter Entertainment's recent market performance and financial metrics provide additional context to Benchmark's bullish outlook. According to InvestingPro data, Flutter has demonstrated strong revenue growth, with a 20.33% increase in quarterly revenue as of Q2 2024. This aligns with Benchmark's positive view on the company's expansion potential in the U.S. and North American markets.
InvestingPro Tips highlight that Flutter's net income is expected to grow this year, supporting the analyst's optimistic stance. Additionally, the company has shown a strong return over the last five years, which reinforces its track record of performance.
However, investors should note that Flutter is currently trading at high EBIT and EBITDA valuation multiples, suggesting the stock may be priced at a premium. This could explain why the recent UK tax speculation had such a significant impact on the stock price.
For those considering Benchmark's view of the current stock price as an entry point, it's worth noting that Flutter's price is currently at 86.81% of its 52-week high, with a year-to-date total return of 22.63%. The InvestingPro Fair Value stands at $229.19, which is below Benchmark's target but above the previous closing price of $219.5.
Investors seeking a more comprehensive analysis can access 8 additional InvestingPro Tips for Flutter Entertainment, providing a deeper understanding of the company's financial health and market position.
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