Berenberg hikes target price on GVC Holdings
Analysts at Berenberg raised their target price on bookmaker GVC Holdings from 900.0p to 1,100.0p on Thursday, stating the group had delivered an "exceptional" second quarter despite Covid-19 related headwinds.
Berenberg said GVC had delivered an "exceptional" trading update that reinforced its view that it was "the name to own" in the space.
Despite obvious headwinds from Covid-19, the German bank highlighted that GVC had managed to operate during the disruption at cash flow neutral, commit to a second round of investment in Roar Digital and report online net gaming revenue growth for the half of 21%, demonstrating "the strength and diversification" of its business model.
Furthermore, Berenberg, which reiterated its 'buy' rating on the company, noted that GVC had indicated that first-half underlying earnings were expected to be in the range of £340m-350m - ahead of expectations.
"Despite a good run in the shares over the past month, the stock remains on undemanding multiples, trading at 10x P/E on 2021 estimates," said the analysts.
Berenberg also acknowledged that the announcement that chief executive Kenny Alexander would be stepping down from the role and be replaced by current chief operating officer Shay Segev, the man responsible for the integration of tech platforms during GVC's merger with bwin.party.