Jefferies cuts Entain PT but maintains 'buy' rating

Jefferies cut its price target on Ladbrokes and Coral owner Entain on Monday but struck an upbeat note on the outlook for the company.

The bank pointed to the fact that Entain lifted its full-year EBITDA expectations in its first-half results, but said that higher interest costs and the recent share placing have led it to downgrade its earnings per share estimates.

Jefferies reduced the price target to 1,460p from 1,805p but said that after a 15% drop in the share price since the results, it appears that downgrades are already priced in.

Jefferies maintained its ‘buy’ rating and said: "Despite few shorter-term trading catalysts, we argue a low valuation, scrutiny around capital allocation and ongoing MGM speculation will underpin Entain's shares."

At 1525 BST, the shares were up 2.5% at 1,182.50p.