Berenberg 'continuing to bet' on Entain's BetMGM turnaround
By Iain Gilbert
Date: Tuesday 11 Feb 2025
(Sharecast News) - Analysts at Berenberg slightly raised their target price on bookmaker Entain from 1,010.0p to 1,035.0p on Tuesday, stating it was "continuing to bet" on the BetMGM turnaround.
Berenberg said Entain was "a top pick" in the leisure space, with the group's recent update from its BetMGM joint venture on 4 February further reaffirming its positive view on the company.
"The US business has turned a corner, stabilising its market share and reaffirming its longer-term guidance of $500.0m of EBITDA," noted Berenberg. "Additional disclosure provided in this update leaves us impressed with the FY24 performance and confident for the year ahead."
The German bank, which has a 'buy' rating on the stock, continues to think that the BetMGM business has been undervalued in Entain's current share price, which it reckons should drive a re-rating this year as the market grows in confidence in BetMGM's outlook.
"We value Entain using a SOTP model and include a value for the BetMGM joint venture. This yields a value per share of 1,035.0p comprised of 620.0p for the ex-US business and 415.0p for the US business. On multiples, Entain trades on 19.4x FY25 EPS estimates, but this falls rapidly to sub-12x in FY26 as both the ex-US and US businesses deliver strong EBITDA growth," concluded Berenberg.
Reporting by Iain Gilbert at Sharecast.com
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