On Wednesday, Susquehanna maintained a Positive rating on shares of Flutter Entertainment (NYSE:FLUT), a $43.8 billion market cap gaming company, but reduced its price target from $322.00 to $317.00. According to InvestingPro data, analysts maintain a strong buy consensus with targets ranging from $250 to $367.
The adjustment comes after Flutter pre-released information the previous night, indicating less favorable NFL sports hold trends, particularly in December. Susquehanna's Joseph Stauff noted the impact of these trends on the company's fourth-quarter estimates for FanDuel, Flutter's U.S. business segment.
Flutter's FTSE-listed shares fell by 2.4% this morning, suggesting that if FanDuel were a standalone entity, its shares might drop roughly 4.0%, based on the assumption that FanDuel represents about 60% of Flutter's value. The company has demonstrated strong revenue growth of 19.86% over the last twelve months, with total revenue reaching $13.57 billion.
This provides a basis for comparison with how competitors like DraftKings (NASDAQ:DKNG) could potentially be affected under similar circumstances. For deeper insights into Flutter's financial health and competitive position, InvestingPro subscribers can access comprehensive analysis and 8 additional ProTips.
Stauff's analysis pointed out that the decrease in FanDuel's fourth-quarter estimates was more substantial than anticipated. The higher parlay mix—bets that combine multiple selections—contributed to the impact when unexpected NFL game outcomes occurred.
While acknowledging the potential for results to normalize and the higher parlay mix to yield benefits in 2025, Stauff also recognized the challenge bookmakers face in adjusting to these variables in relation to NFL trends.
Despite the reduced fourth-quarter estimates for FanDuel and the adjustment in the price target, Susquehanna's outlook for Flutter Entertainment remains optimistic. The firm's long-term estimates are upheld, taking into account the pending acquisitions set for completion by July 1, 2025.
While current EBITDA stands at $1.89 billion, Susquehanna's valuation also incorporates a full year of contributions from Flutter's Italian and Brazilian acquisitions in their 2026 EBITDA forecast for the company's non-U.S. segment. Investors seeking detailed valuation metrics and growth projections can access Flutter's comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Flutter Entertainment, a global gaming giant, has experienced significant financial impacts due to unfavorable NFL results. The company reported a $438 million hit to its Gross Gaming Revenue (GGR), which led to a downward revision in its 2024 US revenue projections by $370 million and its Adjusted EBITDA expectations by $205 million.
Despite this, the firm maintains confidence in its long-term growth potential, supported by a 19.9% revenue growth over the last twelve months.
In response to these developments, Benchmark analysts have maintained a Buy rating for Flutter Entertainment, suggesting that the current weakness could represent a strategic buying opportunity for investors.
Furthermore, Flutter has initiated a share repurchase program, involving the buyback of up to $350 million worth of its ordinary shares, as part of a larger $5 billion initiative managed by Goldman Sachs & Co LLC.
In other developments, Flutter Entertainment disclosed transactions in company securities by its managerial staff and provided an update on its total voting rights, reflecting the company's commitment to transparency. These are just a few of the recent developments for Flutter Entertainment, based on past articles.
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