Jefferies Views Flutter Entertainment as a Strong Choice Amid Market Uncertainty
Jefferies has a bullish outlook on Flutter Entertainment, the parent company of FanDuel. The brokerage recently resumed coverage of the stock with a “Buy” recommendation and set a price target of $380 per share. This target is among the most optimistic on Wall Street, implying a potential 35% upside from the stock’s last closing price.
Jefferies Highlights Flutter’s Resilience Amid Economic Challenges
Jefferies analyst James Wheatcroft believes Flutter is well-positioned to withstand economic downturns due to its strong online focus and global footprint. With over 90% of its revenue generated digitally, Flutter’s broad international presence helps insulate it from broader economic pressures. Wheatcroft also notes that online betting tends to be less sensitive to economic cycles, reducing recession risk for the company. Additionally, Flutter’s solid financial position, including manageable debt levels and an ongoing share buyback program, strengthens its outlook.
Wheatcroft acknowledges concerns about slower growth in the U.S. sports betting market but attributes this primarily to Flutter’s strategic decisions to reduce promotional spending and adjust product offerings, rather than any underlying weakness in the sector.
Global Expansion and Growth Prospects Fuel Investor Confidence
Beyond its strong U.S. foothold with FanDuel, Flutter’s international operations present significant growth opportunities that Wheatcroft believes many investors may be undervaluing. Despite earlier reports of market share challenges in some regions, he views the company as well-positioned to expand in key markets such as the UK, Italy, Australia, and Brazil. Regulatory changes and recent acquisitions support these growth prospects.
Flutter’s global expansion strategy includes acquisitions like Italy’s Snai and the majority stake in Brazil’s NSX Group, strengthening its presence in two major gaming markets.
Jefferies also points to additional catalysts for Flutter’s stock, including potential inclusion in major U.S. stock indices and the continued development of its YourWay platform. The firm projects strong financial growth, forecasting an average annual EBITDA increase of 17% and sales growth of 31% over the next three years—figures it believes the broader market has yet to fully recognize.
From Wheatcroft’s viewpoint, Flutter’s current valuation remains justified given these factors. Even when assigning a premium valuation to its U.S. operations relative to competitors like DraftKings, the stock still appears fairly priced. The $380 price target reflects confidence in Flutter’s long-term growth potential, supported by robust cash flow and shareholder returns.
