Flutter Entertainment PLC (LSE:FLTR) is undervalued but catalysts to the upside are hard to find, according to stockbroker Peel Hunt, which today lowers its price target.
“Flutter has remarkably successful businesses in the US, and we expect them to continue to thrive,” Peel Hunt analyst Ivor Jones said in a note.
Continuing to make a defence for the bullish investment case, Jones says he expects the slump in the stock price for US rival DraftKings will turn out to have been for “company-specific reasons rather than indicating a more general problem in the US market”.
Additionally, he added: “We believe that UK regulation will turn out better than is implied by the current share price.”
Jones notes that “valuations in the US are changing and tough questions are being asked about when profit will be achieved and what multiples to apply.”
Pitching Peel Hunt’s valuation multiple for the US business at 15 times earnings, versus a prior model at 20 times, the analyst sets a new price target for Flutter at 14,500p – down from 17,000p – whilst repeating a ‘buy’ recommendation.