Flutter Entertainment maintains Buy stock rating ahead of investor day

On Wednesday, Flutter Entertainment (NYSE:FLUT) will engage with investors during an Investor Day event in New York, where the company is anticipated to share insights and forecasts that could bolster investor confidence. BTIG maintains a Buy rating on the stock with a steadfast price target of $249.00.

Investor sentiment is reportedly positive ahead of the event, with expectations including an increased U.S. Total Addressable Market (TAM) forecast, ranging from $45 billion to $50 billion, up from the previous $40.5 billion projection. Moreover, the company is expected to reaffirm its long-term U.S. EBITDA margin target of 25-30%, and discuss a potential share buyback authorization between $1 billion and $2 billion.

The event may also provide forward-looking financial guidance, although specifics regarding key performance indicators (KPIs), geographic focus, and timelines remain uncertain. BTIG anticipates that the Investor Day will either strengthen or heighten confidence in Flutter's status as a global leader with prospects for significant revenue growth and upward estimate revisions in the coming years. The firm also suggests that an improved outlook on the U.S. market could positively influence Flutter's main competitor, DraftKings (NASDAQ:DKNG).

While the U.S. market, particularly FanDuel, has garnered much attention, BTIG points out that the international segments of the event could reveal more significant opportunities. Over the past few years, Flutter has hosted investor events focused on specific segments and geographies, but has not conducted a comprehensive event for its entire non-U.S. portfolio.

The firm has observed promising trends in the UK and international segments, which contribute the majority of non-U.S. revenue and EBITDA, and believes there is potential for market share growth and margin expansion due to regulatory and competitive dynamics.

With Flutter's stock currently trading at approximately 8-9 times BTIG's estimated 2025 EBITDA, the firm sees room for a potential increase in the stock's multiple, especially following the anticipated completion of the Snai and Betnacional deals in the second quarter of 2025. These deals are projected to enhance Flutter's non-U.S. performance. Consequently, Flutter remains one of BTIG's top picks in the industry.

In other recent news, Flutter Entertainment has been the focus of several analyst firms. Needham identified the company as a key player in the gaming and betting industry with a strong potential for growth, particularly in the U.S. market, and set a new price target of $270. This follows a 20% increase in Q2 revenue to $3,611 million and a 17% rise in adjusted EBITDA to £738 million. The company also confirmed its acquisition of Snaitech S.p.A., an Italian gaming operator, for approximately €2.3 billion ($2.53 billion), anticipated to conclude in Q2 2025.

Analysts from BTIG maintain a Buy rating for Flutter Entertainment with a steady price target of $249.00, while Barclays and Morgan Stanley both assigned an Overweight rating, with Barclays setting a price target of $263.00. Analysts suggest that Flutter's Italian operations could potentially double in size over the next four to five years, based on consistent market growth and shifts in market dynamics.

In compliance with regulatory requirements, Flutter Entertainment continues to disclose information through the Regulatory News Service and the U.S. Securities and Exchange Commission. The company also announced plans to host an Investor Day event on September 25, 2024. These disclosures align with Flutter Entertainment's commitment to transparency and regulatory compliance. These are the recent developments in Flutter Entertainment's financial performance and strategic initiatives.

InvestingPro Insights

As Flutter Entertainment (NYSE:FLUT) prepares for its Investor Day, a glance at real-time data from InvestingPro shows a company with a complex financial landscape. With a market capitalization of $40.64 billion, the company's growth trajectory is underscored by a 16.28% increase in revenue over the last twelve months as of Q2 2024, suggesting a solid expansion in its operations. This is further bolstered by a 20.33% quarterly revenue growth in Q2 2024, reflecting a strong short-term performance that investors may find reassuring.

However, the company's profitability challenges are evident with a negative P/E ratio of -35.96, which further dipped to -90.93 when adjusted for the last twelve months as of Q2 2024. This indicates that despite revenue growth, profitability has been elusive in the recent past. Moreover, the stock's Price / Book ratio stands at 4.1, which may suggest a premium valuation compared to the company's book value. Notably, the stock has also shown a robust return over the last three months, with a 22.64% price total return, reflecting investor optimism that could be linked to the anticipated positive news from the upcoming Investor Day.

InvestingPro Tips reveal a mixed outlook: while net income is expected to grow this year, suggesting potential for improved profitability, three analysts have revised their earnings downwards for the upcoming period, which could signal caution. Moreover, the stock is in overbought territory according to the Relative Strength Index (RSI), hinting at a possible pullback. For investors seeking a more comprehensive analysis, InvestingPro offers additional tips at https://www.investing.com/pro/FLUT, which may provide deeper insights into Flutter's financial health and stock performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.