On Monday, Susquehanna increased its price target on shares of Flutter Entertainment (NYSE:FLUT) to $273 from the previous $230 while maintaining a Positive rating on the stock. The firm adjusted its second half of 2024 estimates and raised its 2025 and 2026 organic growth forecasts for both the US and non-US operations of Flutter Entertainment. The revision reflects a higher conviction in the company's growth potential following its recent investor day.
The raised expectations are attributed to several factors, including a predicted increase in parlay adoption across all markets, anticipated scale benefits, and improved profitability of cohorts, particularly in the US. Additionally, the potential impact of mergers and acquisitions was considered, with particular emphasis on the promotion of Flutter Edge to prospective targets.
Susquehanna's analysts expressed confidence that Flutter Entertainment's stock is particularly sensitive to the performance and trends of its FanDuel brand. They anticipate that upcoming September results, expected to be released later this week, may prompt further upward revisions to the stock's outlook.
The new price target also takes into account the pending acquisitions in Italy and Brazil, set to be completed by July 1, 2025. The valuation now employs a 2026 EBITDA multiple, as opposed to the previous 2025 multiple, to account for a full year of contributions from these acquisitions.
In other recent news, Flutter Entertainment reported a 20% increase in Q2 revenue to $3,611 million and a 17% rise in adjusted EBITDA to £738 million. The company also announced its acquisition of Italian gaming operator Snaitech S.p.A. for approximately €2.3 billion ($2.53 billion), expected to finalize in Q2 2025. These developments were accompanied by a regulatory filing for a block listing application for its ordinary shares and an update on its total voting rights.
In the realm of analyst assessments, Craig-Hallum maintained a Buy rating on Flutter Entertainment shares and increased the price target to $275. Oppenheimer raised its price target for the company to $300. Benchmark reiterated its Buy rating for the company, citing its strategic vision and robust global strategy.
InvestingPro Insights
Flutter Entertainment's recent performance aligns with Susquehanna's optimistic outlook. According to InvestingPro data, the company's revenue grew by 16.28% over the last twelve months, reaching $12.88 billion. This growth is even more pronounced in the most recent quarter, with a 20.33% increase, supporting the analysts' bullish stance on the company's expansion.
InvestingPro Tips highlight that Flutter's net income is expected to grow this year, and analysts predict the company will be profitable. This projection is particularly significant given that Flutter has not been profitable over the last twelve months, suggesting a potential turnaround that could justify Susquehanna's increased price target.
The company's strong recent performance is reflected in its stock price, with a 21.71% return over the last three months and an impressive 47.53% return over the past year. These figures underscore the market's growing confidence in Flutter's strategy and growth prospects.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Flutter Entertainment, providing a deeper understanding of the company's financial health and market position.
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