DAVY VIEW

Flutter issued a post-close trading update this morning. The ex-US performance was in line with expectations. The US business again showed very strong underlying momentum, which augurs well for 2024 and beyond. As had been widely flagged, sporting results were a headwind in November – negatively impacting Q4 revenue guidance by £147m or $225m. Although a headwind to FY23 earnings, sporting results typically revert and so are not fundamental to the investment case. The market should focus on the strong KPIs, including: (i) market share gains; (ii) structural hold (win margin) improvements; and (iii) growth in the ex-US business. We view any potential weakness in the share price from sporting results as a buying opportunity.