Citigroup upgrades Ladbrokes, says shares have fallen far enough

It said the new target price represents the mid-point between the upside potential it sees under a deal scenario and the downside risk under a no-deal scenario.

Citi estimated the share price upside potential from a merger with Gala Coral at around 30% and the downside risk if no deal emerged also at around 30%.

“The competition authority investigation will rumble on for several more months, dampening any need to take a strong view in the shorter term,” the analysts said.

Citi added that the two key catalysts that could drive a more positive view were trading updates citing an online pick-up, with a rise in active customers and net gaming revenues, and CMA deal clearance arriving earlier than the bank’s mid-2016 expectation.

At 1407 BST, Ladbroke shares were down 0.8% at 105.10p.