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Paddy Power Betfair shares rise as Numis upgrades its rating to ‘add’ from ‘hold’

Numis said the UK online gambling market remains attractive for global online players, but international diversification and scale remains equally important
Paddy Power
The City broker’s analysts said their key pick in the sector remains GVC Holdings

Paddy Power Betfair PLC (LON:PP) shares rose on Friday as city broker Numis upgraded the FTSE-100 listed bookmaker to ‘add’ from ‘hold'.

In a note to clients, Numis analysts said the UK online gambling market remains attractive for global online players but international diversification and scale remains equally important.

Therefore, the analysts turned more positive on Paddy Power Betfair following the company's recent share price weakness. 

READ: Changing horses: Paddy Power Betfair poaches new CFO from Saga

The broker’s analysts, however, said their key pick in the sector remains GVC Holdings PLC (LON:GVC).

The analysts said: “We calculate that both are discounting a worst-case scenario of a 5ppt rise in a point of consumption tax (POC), a £2 maximum fixed-odds betting terminals (FOBT) stake and the exit of online gambling in Germany.”

The government has been looking at reducing the maximum bet to £2 from £100 on FOTBs to address problem gambling.

In lunchtime trading, company’s shares rose 1.5% to 7,105.0p.

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