LONDON (ShareCast) - (Sharecast News) - Analysts at Canaccord Genuity hiked their target price on gambling firm 888 Holdings from 510.0p to 690.0p on Thursday, stating the group was now "off to the races".
Canaccord Genuity believes 888's acquisition of William Hill International will be "transformational" in terms of earnings but also strategically.

The Canadian bank, which has a 'buy' rating on the stock, thinks the enlarged group will gain leading positions in key regulated markets as a result of the acquisition, with "a diversified product mix" and "enhanced scale to drive future growth".

Canaccord also said significant cost synergies of at least £100.0m had been identified by 888 across a number of areas, which will help to drive "improved profitability and margins".

"Consolidation has played an important role in the market in recent years and this transaction helps to strengthen 888 competitive position, albeit the increased scale and proprietary tech platform will also likely make it more attractive to a larger industry player looking to participate in further consolidation," said the analysts.

"Acknowledging the increased leverage but also the additional scale and opportunities from the transaction as well as the potential for additional revenue synergies along with ongoing consolidation activity we increase our TP to 690.0p, based on a SOTP approach."

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