DAVY VIEW

GVC’s Q1 trading update confirms that the group has had a solid start to the year. Q1 net gaming revenue (NGR) rose by 8%, albeit the pace of growth has moderated in recent weeks (the January-February period increased by 11%). The statement is a reminder that the group is enjoying decent trading momentum after a tumultuous period for the stock. Our sense is that there is upside risk to current consensus estimates (our forecasts are modestly higher, +1.5%). Its performance is at odds with the current valuation, albeit there are clearly multiple reasons (stock and sector specific) to explain the valuation disconnect at present.