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On Friday, Jefferies resumed coverage of Playtech (LON:PTEC), a technology company specializing in the gambling industry, with a Buy rating and a price target of £3.95. The firm’s analysts highlighted the company’s potential for significant growth, noting the benefits of its business-to-business (B2B) model in the expanding online gambling sector.
The analysts at Jefferies emphasized Playtech’s strategic positioning, which allows investors to engage with the global increase in online gambling without being tied to a specific operator. This operator-agnostic approach is seen as a key advantage for Playtech, as it provides a level of insulation from the performance of individual gambling platforms.
Jefferies set a price target based on a discounted cash flow (DCF) analysis, suggesting a 25% upside from the current trading price. This new target reflects confidence in Playtech’s capacity to achieve substantial profit and free cash flow growth. The analysts noted the management’s commitment to doubling profits and free cash flow as a positive sign for the company’s future financial health.
In their coverage, Jefferies also pointed out the company’s intention to return value to shareholders through distributions, indicating a proactive approach to capital management that could benefit investors.
Playtech’s focus on the B2B sector within the online gambling market is a strategic choice that Jefferies analysts believe will pay off, as the company aims to capitalize on the broader trend of increased online penetration in the industry.
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