RBC Capital hikes price target on Flutter Entertainment

RBC Capital Markets lifted its price target on Paddy Power Betfair owner Flutter Entertainment on Wednesday following the company’s half-year results a day earlier.

The bank, which kept its rating on the shares at ‘outperform’, increased the price target to 1,750p from 1,600p. When it upgraded the stock a couple of weeks, it argued the share price weakness of the last few months had been overdone and that fundamentals remained sound.

"Yesterday's interim results served to reinforce this message," it said.

Flutter said on Tuesday that first-half earnings rose 75% as the gambling group benefited from the acquisition of Stars in the US and restoration of sporting events as the Covid-19 crisis eased.

Adjusted earnings before interest, tax, depreciation and amortisation increased to £597m from £342m in the six months to the end of June from a year earlier as revenue doubled to £3.05bn from £1.54bn. Excluding the US, adjusted earnings doubled to £684m from £339m.

The company, which also owns Betfair and FanDuel in the US, said the second half had started well and it expected full-year earnings, excluding the US, of £1.27bn to £1.37bn assuming no further disruption from Covid-19.