Paddy Power Betfair

Investor day reinforces US opportunity

  • Sectors : Gaming
  • Companies : Paddy Power Betfair

Ratings and price correct at time of issue.

  • Paddy Power Betfair

    Closing Price: 6270p

  • RATING 29/08/17

  • PREVIOUS RATING 18/09/15

    OUTPERFORM

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%.

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Apr 8 2019, 07:20 IST/BST

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