Jefferies has upped its price target for Entain on growing success of gaming joint venture BetMGM.
The bank said that BetMGM, Entain’s gaming joint venture with US casino group MGM, had “real momentum, with an 18% US market share and number position in iGaming in January. A BetMGM update on 21 April will likely further fuel interest and raise execution confidence”.
It continued: “Entain’s equity story is highly appealing, with double-digit online revenue growth, online scale, proprietary technology, balance sheet scope for M&A and US upside from BetMGM.”
The bank lifted its price target to 1,850p from 1,500p and said there was around 25% upside.
Jefferies, which has a ‘buy’ rating on the blue chip, also updated its estimates on Monday, with earnings before interest, tax, depreciation and amortisation now forecast to be -3%, +3%, and -1% for the 2021, 2022 and 2023 full years respectively.
“An almost doubling of the BetMGM joint venture losses and an increased tax change explain the charges,” it said. “The mix of profit changes for the 2021 full year, with lower retail profitability due to ongoing lockdowns, offset by stronger online.”
In January, MGM abandoned its £8bn all-share takeover bid for Entain, after the owner of Ladbrokes and PartyPoker rejected the offer.
