DAVY VIEW

Flutter has released Q4/FY25 numbers. In the US, the final quarter of the year was behind our expectations and guidance as weaker handle trends caused by lower recycling and inefficient promotional spend impacted. International performance was resilient. Attention quickly shifts to the FY26 guidance. At the respective mid-points, group revenue is guided to grow 12% and aEBITDA is now expected to grow 4% (+14% growth excluding the Predicts launch). The aEBITDA forecast is c.15% below Visible Alpha recent consensus. However, the shares have de-rated very significantly and trade on 10.8x 2026 EV/EBITDA guidance. This is a significant discount to long-term averages. On the call, management struck a relatively confident tone that it will see sequential improvements in the US growth trajectory as it moves through 2026. Importantly, it is quite categoric that it is not seeing a meaningful impact from Prediction markets in its regulated sports betting states.