Canaccord drops target price on Playtech despite 'positive' update on Asia
By Iain Gilbert
Date: Monday 12 Nov 2018
(Sharecast News) - Analysts at Canaccord Genuity cut their target price on gambling software company Playtech on Monday despite its "positive response" to the group reiterating its full-year guidance and signs of "some" stabilisation in the firm's Asian business.
Playtech told investors on Monday that it remains on track to achieve 2018 adjusted earnings before interest, taxes, depreciation and amortisation of between €320m and €360m.
However, as analysts at the Canadian broker pointed out, Playtech shares have been the "weakest performer in a weak sector" of late, leaving its shares at a material discount to the sector.
Canaccord downgraded its target price for Playtech to 630p from 700p previously but reiterated its 'buy' rating on its stock, noting that the shares should "respond positively" to the news that its Asian operations had begun to stabilise.
"Overall, this is a reassuring update. Given the extent of the deterioration in Asian trading over the past 12 months, it is reassuring to see some stabilisation," said Canaccord.
The broker also highlighted the ability go Playtech's core businesses to continue delivering underlying growth, while pointing out that the performance of its recently acquired Italy unit, Snaitech, appeared to be on track.
As well, Playtech revealed that momentum reported at the interims in Snaitech had continued into the second half of the year, with the business still trading in line with the group's expectations.
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