Analysts at Deutsche Bank slashed their target price for shares of 888 following the company’s first set of results following completion of the acquisition of William Hill.
Proforma revenue growth did move back into the black, they said, but to just 1%, and they were anticipating a 5% reduction to management’s forecasts for full-year 2022 earnings before interest, taxes, depreciation and amortisation.
They also highlighted the combination of balance sheet, execution and regulatory risks inherent in the company.
All told, they lowered their target price from 350.0p to 296.0p.
Nevertheless, their recommendation remained at ‘buy’ as the discount in terms of the shares’ enterprise value to EBITDA looked “excessive”.
Furthermore, they spied “material” upside potential to the synergies obtained through the merger, arguing that they could more than offset the hit from the UK’s regulatory white paper.
