William Hill given a 'sell' rating by Investec but target price lifted

William Hill was under the cosh on Monday after Investec reiterated its ‘sell’ rating on the stock following the gaming group’s trading update.

In a trading update last Thursday, William Hill reported full-year adjusted operating profit of £290m, in line with market expectations but lower than £372.2m the previous year. Net revenue during the period was £1.59bn down from £1.61bn a year earlier.

Chief executive James Henderson said its online unit suffered some disruption around the implementation of new sports betting mobile web and iOS app Project Trafalgar, which was launched during the fourth quarter, but “we are rapidly addressing that”.

“Our forecasts are broadly unchanged, however note that the transition risk relating to Project Trafalgar has fallen as the iOS transition is now complete,” said Investec analyst Alistair Ross.

“We increase our target price by 20p from 323p to 346p for lower transition risk (1/3 complete). With no transition risk relating to Trafalgar, our target price would be 382p. We maintain our Sell.”

Shares fell 0.60% to 378.10p at 1042 GMT.