JPMorgan, Goldman Sachs bullish on British bookmakers Flutter Entertainment and William Hill

JPMorgan, Goldman Sachs bullish on British bookmakers Flutter Entertainment and William Hill

British bookmakers Flutter Entertainment Plc and William Hill Plc have once again earned praise from the analysts at investment banking and credit-rating firms Goldman Sachs Group and JPMorgan Chase & Co.

Flutter Entertainment, the parent firm of sportsbook operator FanDuel, and William Hill have recommended “buy” ratings on the stocks of the two bookmakers and boosted their price targets.
Flutter and William Hill enjoy dominant positions in their home market of the United Kingdom. But analysts are growing bullish on the stocks of the two bookmakers due to their exposure to the United States.

Flutter Entertainment recently finalized its $12.2 billion acquisition of The Stars Group, in a deal that created the biggest online gaming firm of the world. Goldman Sachs underlined that the deal also gave the company the ability to earn a better position among a number of major betting markets, including Australia, the United Kingdom, and the United States.

The acquisition of The Stars Group brought a complementary set of products along with a strong user base to the fold of Flutter entertainment. According to Goldman Sachs, Flutter Entertainment is “best positioned” in its coverage to capitalize on the two most important structural themes in the sector. The investment firm reinstated a “buy” rating on the stock of Flutter Entertainment.

William Hill’s shares got a boost recently when the company announced its plans to raise capital by selling equity. JPMorgan analyst Ted Nyhan said the decision will not only help the company to reduce leverage but also provide it a buffer against regulatory risk in the United Kingdom while expanding its business in the United States. The analyst upgraded the William Hill’s stock from “overweight” to “neutral” and increased price target by 25 per cent.

It is all about Flutter and William Hill’s exposure to US market that made the analysts to upgrade the two British bookmakers. Analysts have estimated that the US sports wagering market could eventually be worth more than $20 billion. Flutter and William Hill are the handful global operators which are most likely to benefit from that growth.

Flutter’s FanDuel is likely the only credible competitor to DraftKings in the field of daily fantasy sports (DFS), while William Hill’s presence in the US market is expected to expand due to Eldorado Resorts’s proposed takeover of Caesars Entertainment.