DAVY VIEW

Entain released a largely in-line Q3 trading update this morning. Online Net Gaming Revenue (NGR) guidance has been retained as has the EBITDA guidance range despite the impact of some unfavourable sports results in September. Entain’s performance has been much more resilient of late, and we do not envisage making any meaningful changes to our forecasts on the back of this update. The risk surrounding UK tax may cap share price performance until we get clarity; however, increasing evidence from the Netherlands that the overall tax take will decline if onerous tax rates are introduced combined with the likelihood of second order economic impacts suggest to us that any tax increases will be manageable (see our note ENT ering’ a more stable phase?; moving to 'Outperform').