Flutter Entertainment

US inflects into profitability

  • Aug 9 2023, 07:25 IST/BST
  • Paul Ruddy
  • Company Report
  • 7 page(s)
  • Sectors : Gaming
  • Companies : Flutter Entertainment

Ratings and price correct at time of issue.

  • Flutter Entertainment

    Closing Price: 14905p

  • RATING 08/05/19

  • PREVIOUS RATING 29/08/17

    NEUTRAL

DAVY VIEW

Flutter has reported a strong H123, beating our expectations, with the US outperforming again and achieving good profitability in H1 – the first operator to achieve this feat for a half year’s trading. In a sector where scale is key, the US business generated almost 35% more revenue than the no.2 operator and more than double the no.3. The UK&I and International divisions are performing very well and despite flagging greater levels of post–Covid reversion in Australia, FY guidance (at the mid-point) is in line with our expectations. We continue to believe that the group is in the early stages of a US driven upgrade cycle and growth prospects remain attractive in its ex-US business. Furthermore, it is a globally diversified, high margin and cash generative business. Trading on 11.4x 2025 EV/EBITDA, we believe valuation is attractive and retain our ‘Outperform’ rating.

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Aug 9 2023, 07:25 IST/BST

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