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On Saturday, Citi analysts announced a downgrade of OPAP SA (OPAP:GA) stock from Buy to Neutral, despite raising the price target from EUR19.00 to EUR20.50. The adjustment follows a notable year-to-date surge in the company’s share price, which has risen approximately 26%. The analysts cited an anticipated slowdown in earnings momentum as a key factor for the downgrade.
According to Citi’s assessment, OPAP’s near-term earnings potential is likely to be hampered by the comparison to a particularly strong performance in 2024. The firm’s next twelve months (NTM) price-to-earnings (P/E) ratio has re-rated to over 14 times, a level considered the highest in recent years for OPAP. Citi’s analysts project that gross gaming revenue (GGR) and earnings per share (EPS) growth will decelerate to around 3-4% for the years 2025 to 2026, which could constrain further stock-specific re-rating.
The revised price target of EUR20.50 reflects a P/E ratio of 15 times the 2025 estimated earnings. Despite the price target increase, Citi’s analysts suggest that the potential for total shareholder return is limited, justifying the Neutral stance on the stock. The firm also forecasts that OPAP could deliver an estimated dividend yield of approximately 8% in 2025.
OPAP’s stock performance has been strong thus far, but Citi’s analysis indicates that investors may see a plateau in growth as the company faces a high comparative base from the previous year’s earnings. The updated price target acknowledges OPAP’s value but tempers expectations for future gains.
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