Berenberg raises target price on Flutter Entertainment
Analysts at Berenberg hiked their target price on gaming outfit Flutter Entertainment from 14,300.0p to 14,700.0p on Thursday, stating that first-quarter revenue trends were "encouraging".
Berenberg said it continues to like Flutter as its operational performance over the course of 2020 and the first three months of 2021 had continued to track ahead of its expectations.
That said, Berenberg cautioned that it remains of the view that the valuation continued to look full at current levels and noted that the risk/reward profile was finely balanced, leading it to stand by its 'hold' rating on the stock.
"The valuation also looks rich. While we think Flutter is deserving of a rich valuation given its growth prospects in the US as well as the tailwinds in the Australian business, we see little room for multiple expansion at these levels," said Berenberg.
"We use a divisional DCF sense-checked by multiples to value the ex-US business, yielding a value per share of 6,500.0p. Our US valuation for the sports-betting and iGaming opportunity gives a value per share of 7,978.0p and we value the US DFS business and TVG horseracing business at 234.0p per share."