Berenberg lowers target price on Entain

Analysts at Berenberg lowered their target price on bookmaker Entain from 2,060.0p to 1,950.0p on Wednesday, stating there was still value in the shares despite the company's "weaker" second-quarter trading performance.

Berenberg said Entain's second-quarter trading update disappointed the market, leading it to downgrade numbers to reflect lower full-year online net gaming revenue growth expectations.

However, Berenberg, which reiterated its 'buy' rating on the stock, stated it does not think that Entain's share price has "fallen too far" at current levels.

"At the current share price, the market is either materially undervaluing Entain's prospects in the US or in its non-US operations – both of which are unjustified, in our view," said the German bank.

"We value Entain using a divisional DCF model and blend in a value for the US, which gives our price target of 1,950.0p – comprising of 1,060.0p for the ex-US business and 890.0p for the US."

Reporting by Iain Gilbert at Sharecast.com