DAVY VIEW

Ahead of Flutter’s FY25 earnings, we update our forecasts. Q4 forecasts for the US come down but remain within the guidance range as the well-publicised handle softness impacted. A key question on investors’ minds is whether Prediction Markets (PM) are impacting current regulated sports betting. We believe the recent share price weakness implies structural challenges to the business arising from Prediction Markets. However, we believe the recent weakness in handle relates to a confluence of short-term factors as opposed to any transformational structural change in the prospects for regulated sports betting. If we are correct, current levels provide a compelling entry.