Broker tips: Clinigen, Flutter Entertainment
Analysts at Liberum lowered their target price on pharmaceutical services and products group Clinigen from 886.0p to 800.0p on Friday but stated risks still appeared to be "skewed to the upside".
Liberum said it had updated Clinigen model in order to reflect recent results and the group's new reporting structure.
The analysts said Clinigen's owned products performance had disappointed and drove "mid-single-digit downgrades" to sales and underlying earnings estimates.
However, Liberum said sales should recover in 2022 and will underpin mid-single-digit compound underlying earnings growth through to 2026. It also highlighted that excludes "upside optionality" for Clinigen's Proleukin.
"Irrespective of the Proleukin optionality our DCF of £8.0 per share (down from £8.86) offers attractive 33% upside. We retain our 'buy' recommendation," said Liberum.
Berenberg upgraded Flutter Entertainment to 'buy' from 'hold' on Friday, saying a recent pullback in shares following the group's results offered an attractive entry point, with around 18% upside to the current share price.
"Flutter has always ticked all our key boxes: geographic diversification, scale and a strong presence in the lucrative US market," it said.
"This has historically been tempered by valuation premium and concerns over an ongoing litigation case in Kentucky which has now been resolved."
While the German bank cut its price target on the stock to 15,000.0p from 15,800.0p as a result of changes in the Netherlands, which it expects to unwind in the back half of 2022, and the implementation of proactive responsible gambling policies in the UK in advance of regulatory changes, Berenberg believes the weakness in the shares to be "unjustified and overdone".
Berenberg added that operational momentum remains strong and that it continues to expect Flutter to shake out as the market leader in the lucrative US market.
In Australia, it expects the group's Sportsbet brand to be a market share gainer, while in the UK market, active monthly player growth has remained robust in FY21 despite the tough comparable period.