DAVY VIEW

Entain updated on trading this morning, highlighting weaker top- line growth but reiterating full year EBITDA guidance. It now expects overall Q3 online net gaming revenue (NGR) growth to be up high single digits and down high single digits on a proforma basis. As a result, it has revised down its full year expectations for revenue growth but has retained its profit guidance range due to “robust operational controls”. Online proforma NGR tends to be a key indicator for Entain, so this is a disappointing update. The share price has been weak in recent weeks and the valuation of 8.4x EV/EBITDA, or <6x ex-BetMGM, has factored in some weakness. The group will update on actions to accelerate operational strategy and performance on November 2nd, when further detail around current trading and the prospects for the return of organic growth will be key.