Flutter Entertainment PLC (LON:FLTR) has been upgraded to ‘overweight’ from ‘equal weight’ by analysts at Barclays, who following their survey of the UK gambling market highlighted the company’s Sky Bet division as the “leading UK betting brand” as the industry recovered from the coronavirus pandemic.
In a Tuesday note, the bank’s analysts also upped their target price for the Paddy Power owner to 13,000p from 10,500p, highlighting the firm’s high valuation and “attractive core” business while its US operations served as a “quality compounder”.
READ: Flutter Entertainment expects small full-year loss in US but encouraged by post-lockdown trading
The bank also highlighted that its survey had shown that in addition to Sky Bet, Flutter’s Paddy Power brand was also rated as the third most preferred online betting brand in the UK.
“We consider online strength to be a key driver of medium-term online staking growth from new and existing customers, particularly in a [coronavirus] world and our survey indicates that Flutter brands are best-placed to benefit”, the bank said.
Analysts said while the company has seen “strong online trading” and its US joint venture offered upside, an ongoing investigation by HMRC into its former Turkish business was “an overhang” for the group’s prospects.
Meanwhile, peer William Hill PLC (LON:WMH) was reiterated at ‘overweight’ with a target price of 240p as Barclays said the company’s upside from its US ventures trumped regulation risks and that the risk-reward “remains favourable”.
Shares in Flutter were down 1% at 11,195p in late-morning trading, while GVC fell 4.4% to 791p and William Hill was flat at 180.9p.