On Wednesday, analysts at Morgan Stanley increased their price target on Flutter Entertainment Inc. (FLTR:LN) (NYSE:FLUT) to ₹191.00 from a previous ₹180.00, but maintained their overweight rating on the stock.
The revision follows Flutter’s strong second quarter performance, with revenue up 20% to $3.611 billion and adjusted EBITDA up 17% to £738 million. These figures beat Visible Alpha’s consensus and the company’s forecasts by 7/6% and 14/16%, respectively.
Analysts highlighted that Flutter’s performance beat expectations, particularly in the US, with adjusted EBITDA coming in at $260 million, 36% above consensus.
The strong results led to an upward revision of both international and US forecasts by 2/4% at the midpoint, which includes the absorption of a $40 million net impact from Illinois tax changes and an additional $20 million allocated to higher ROI investments.
Following the strong quarterly results, Morgan Stanley raised Flutter’s EPS forecasts for fiscal 2024, 2025, and 2026 by 5/3/3%.
The upgrade includes a small charge from interest costs. The new target price of £191 represents a 31% upside to the stock’s most recent closing price, with the analyst reaffirming Flutter as their top pick in the gambling sector.
The positive outlook is based on Flutter’s recent financial performance and an adjustment to future revenue expectations. The company’s strong performance in its key markets, particularly the U.S., is a key driver for the optimistic assessment and maintaining the Overweight rating.
InvestingPro Insights
As Flutter Entertainment Plc continues to perform well on financial performance, real-time metrics and InvestingPro tips provide further context for investors considering the stock. According to InvestingPro data, Flutter has a market capitalization of $37.24 billion and is showing impressive revenue growth of 19.29% over the past 12 months as of Q1 2024. This growth is supporting analysts’ optimistic outlooks and encouraging upward revisions to Flutter’s target price.
According to InvestingPro Tips, Flutter’s net income is expected to increase this year, which is in line with analysts’ forecasts and could be a driving force for the company’s future performance. Additionally, the fact that two analysts have revised their earnings upwards for the upcoming period further boosts confidence in the company’s potential. However, it is worth noting that short-term liabilities exceed current assets, indicating potential concerns regarding liquidity that investors may need to monitor.
For those interested in learning more about Flutter’s financials, InvestingPro offers a total of nine tips, including insights into profitability and valuation multiples. These tips can be accessed through the InvestingPro platform and provide valuable guidance for both short-term trading and long-term investment strategies.
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