DAVY VIEW

Market share data and recent upwards revisions to forecasts for Entain and BetMGM indicate that the group has stabilised in a number of its key markets after a long period of market share losses. Market growth forecasts for its key online markets are healthy, and we believe it can now grow broadly in line with these rates. A few uncertainties remain, including potential UK tax hikes, the AUSTRAC civil penalty and leverage that remains too high for a sector subject to regulatory shocks. We attempt to solve for these in our sum-of-the-parts. We raise our price target to 1080p and our rating to ‘Outperform’.