Canaccord Genuity lowers target price on 888 Holdings

Canaccord Genuity said 888's update highlighted a revenue fall of 7% year-on0year, with trading continuing to be impacted by the provision of enhanced player safety measures in the UK and the closure of its Netherlands business.

The Canadian bank stated that whilst revenues were "slightly behind" its prior expectations, 888 now expects "good progress on synergies and cost efficiencies" to result in an improved adjusted underlying earnings margin in the second half and full-year adjusted EBITDA in line with market expectations.

"Guidance on financing costs has been updated to reflect the recent significant movements in both FX and forward interest rate expectations resulting in meaningful reductions to adj. PBT/EPS expectations," said Canaccord.

"The next catalyst is likely the CMD in late November and we expect a detailed update on the integration of the two businesses and plans to extract and deliver the significant synergies previously outlined."

Canaccord Genuity reiterated its 'buy' rating on the stock.

Reporting by Iain Gilbert at Sharecast.com