Broker tips: William Hill, BT Group, Rolls Royce

Analysts at Jefferies laid out their scenario analysis for William Hill, the most 'bullish' of which could see the shares gain more than half in value to 460.0p.

Admittedly, their downside scenario could see them fall to just 80.0p.

The key to the bookie's success were its US operations, with Jefferies judging the firm to be "strategically well-positioned" to benefit from the multi-year, high growth opportunity in American sports betting and iGaming - which in turn merited a "premium" valuation.

"As more US states legalise, more quickly than we expected,

the prize is substantial," the broker said.

"We estimate the US market will be worth some $19bn in net revenue by end 2023, equivalent to c$5bn EBITDA at maturity."

Credit Suisse has upped the price target for BT Group shares, and reiterated its ‘outperform’ rating, after the telecoms group hiked its prices.

BT – which also owns mobile phone brand EE – confirmed earlier this month that landline, broadband, TV, sport and mobile bills will increase in line with inflation plus 3.9% from March 2020.

Credit Suisse said it was increasing the target price to 185p from 180p after upgrading 2023 earnings per share forecasts by 4% on the back of the move.

It raised full-year 2022-23 EBITDA by 0-1% “to reflect the impact of the consumer price increases. Full-year 2022-23 EPS estimates rise 1-4% and BT Group FY 22-23 normalised free cashflow forecasts rise 1-5%.”

The bank said: “We reiterate our thesis of BT returning to EBITDA growth in 2022 as near-term Covid-19 impacts on global sports events and the UK economy reverse.

“We forecast a 1% BT Group EBITDA growth between 2020 and 2023 to £8.90bn, with consensus much too pessimistic, in our view, in forecasting a 4% decline over the same period.”

JP Morgan cut its price target for Rolls-Royce shares for the second time in a month and warned the troubled engine maker needs at least £6bn of new equity.

The investment bank's analyst David Perry reduced his price target to 65p from 80p and kept his 'underweight' rating on Rolls-Royce's shares.

Rolls-Royce will warn soon that 2021 free cash flow will be less than the consensus estimate for a £864m outflow, Perry predicted.

Rolls-Royce has confirmed reports that it is considering raising £2.5bn of capital from a rights issue and other sources. These are said to include sovereign wealth funds.