DAVY VIEW

The land of opportunity or the home of the brave? We think the former. The Paddy Power Betfair (PPB) investor day in New Jersey reinforced our initial view that the US opportunity is exciting and potentially very valuable for the group. Admittedly, there remain multiple variables to consider (not least the timing of market ramp-up). However, on the basis of a 12-24 state market over time, our analysis suggests that the US could be worth £10-20/share. At the mid-point, this implies the core group is trading on a 2020 P/E of 11.1x and a free cash flow (FCF) yield of just 9.7%.