DAVY VIEW

The FanDuel business has made remarkable progress in the relatively new US market. The combination of the ‘Flutter Edge’, the FanDuel brand and strong management has led to what looks like an unassailable lead in US sports betting. As the US market evolves, it is becoming increasingly attractive, and there is growing evidence that it will be highly consolidated. Despite taking a conservative approach, our US upgrades transform the group profit trajectory, leverage profile and valuation multiples. We believe this is the start of a US-driven upgrade cycle. A derivative of this is that the majority of future revenues will come from high growth, high margin regions. We retain an ‘Outperform’ rating and see a group valuation of £186 in 2024.