On Wednesday, Wells Fargo (NYSE:WFC) adjusted its price target on shares of Flutter (LON:FLTRF) Entertainment (NYSE:FLUT), increasing it slightly to $212 from $210, while maintaining an Equal Weight rating on the stock.
The revision followed the company's adjusted EBITDA, which surpassed both the analyst's and the Street's expectations. The improved figures were attributed to performance outside the United States compensating for a shortfall in the U.S. market, where results were impacted by a low hold in late March.
Flutter Entertainment's U.S. revenue saw a significant year-over-year increase of 56% up until March 17, before concluding the first quarter at a 32% increase. Despite the positive trend, the analyst noted that the company could have communicated the impact of the low March hold more effectively. The update on this was provided on March 26. However, the analyst regarded this as a minor issue, given the overall robustness of Flutter's U.S. metrics.
The company's U.S. operations demonstrated a strong structural hold, approximately 13.5%, which is an improvement of 220 basis points year-over-year. Additionally, Flutter Entertainment captured a 46% share of the Online Sports Betting (OSB) market and a 27% share in iGaming. The analyst highlighted these figures as indicative of the company's solid performance in the sector.
Outside the United States, Australia was a key driver of the positive results, delivering high hold, while the United Kingdom and Ireland markets performed solidly. The international segment was described as stable, rounding out a positive global picture for the company.
Wells Fargo's updated price target reflects a modest optimism in Flutter Entertainment's ability to navigate market challenges and capitalize on growth opportunities in various regions. The Equal Weight rating suggests that the firm views the stock as fairly valued at the current levels, following the recent financial outcomes.
InvestingPro Insights
Following Wells Fargo's recent price target adjustment for Flutter Entertainment (NYSE:FLUT), insights from InvestingPro shed further light on the company's financial health and market performance. With a market capitalization of 36.23 billion USD and a substantial revenue growth of 19.29% over the last twelve months as of Q1 2024, Flutter Entertainment appears to be expanding its financial footprint. Notably, the company has experienced a significant price uptick of 27.81% over the past six months, indicating strong investor confidence and market momentum.
InvestingPro Tips highlight that analysts predict Flutter Entertainment will be profitable this year, aligning with the revenue growth and suggesting a potential turnaround from the non-profitable status over the last twelve months. However, it's important to note that short-term obligations exceed liquid assets, which could pose liquidity challenges. For those looking to delve deeper into Flutter Entertainment's financials and future outlook, there are 11 additional InvestingPro Tips available, providing a comprehensive analysis of the company's prospects.
Investors considering Flutter Entertainment may find the InvestingPro Fair Value estimate of 206.86 USD particularly useful, especially when compared with the analyst target of 243.5 USD. This discrepancy offers a perspective on the different valuation methods and potential room for growth. For those interested in gaining more insights and tips, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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