Deutsche raises GVC price target, predicts positive trading update
By Sean Farrell
Date: Tuesday 07 Jul 2020
(Sharecast News) - Deutsche Bank raised its price target for GVC shares and said the gambling company's trading statement on 16 July should bring positive news.
The bank reiterated its 'buy' rating on GVC's shares and increased its target price to £10.40 from 930p. GVC was the biggest gainer in the FTSE 100 index, rising 3.1% to 813.40p at 15:28 BST.
Deutsche's analyst Simon Davies said retail would be a drag on GVC's growth in the first half after its Ladbrokes and Coral chains were closed for three months but that sports betting held up better than expected. He increased his forecast for 2020 earnings per share by 12% and by 8% for 2021.
Sports betting has recovered strongly since football and racing restarted in June and online gaming has had "spectacular growth" during lockdown, Davies said. He predicted first-half earnings before interest, tax, depreciation and amortisation of £307m "putting upward pressure on [full-year] forecasts".
"Overall we see group H1 revenues down 12% but online gaming should show double-digit organic growth despite the pandemic," Davies wrote in a note to clients.
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