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On Friday, Berenberg updated its outlook on Entain PLC (ENT:LN) (OTC: GMVHF), lowering the price target to GBP10.20 from GBP11.40, while still recommending a Buy rating on the stock. The firm highlighted that despite a 37% decline in Entain's share price year-to-date, the company's potential in both the US and international markets has not been fully recognized.
Entain has faced challenges with earnings downgrades and market share losses, leading to skepticism in the market. However, the company's recent increase in ex-US EBITDA guidance alongside first-half results was seen as a positive development. Since the guidance was raised on August 8, Entain's stock has experienced a 20% rally.
The firm anticipates that if Entain's third-quarter results align with expectations, the positive trend in the company's share price could continue. Berenberg also pointed to the launch of Angstrom in the US as a factor that could enhance Entain's product and technology offerings, potentially leading to a better performance of BetMGM in the US market.
Berenberg's stance suggests that while immediate results may not be evident, any signs of improvement for BetMGM could lead to a reassessment of Entain's valuation. The analyst's commentary underscores the belief in Entain's capacity to navigate its current challenges and capitalize on its strategic initiatives.
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