JPMorgan upgrades William Hill to 'overweight' after placing

JPMorgan Cazenove upgraded its recommendation on shares of William Hill to ‘overweight’ from ‘neutral’ on Friday, lifting the price target to 200p form 160p as it argued the recent placing reduces balance sheet risk and enables the group to capture US online market share.

FTSE 250

20,508.75

15:45 15/11/24

n/a

FTSE 350

4,453.56

15:45 15/11/24

n/a

FTSE All-Share

4,411.85

15:45 15/11/24

n/a

Travel & Leisure

8,607.27

15:45 15/11/24

-0.29%

-25.35

William Hill

271.80p

09:58 22/04/21

0.00%

0.00p

"Earlier this week WMH took advantage of a share price recovery (from the March low of 37p), raising capital to meet investment requirements in the US while curing a leverage problem in advance of looming regulatory threats in the UK," it noted.

JPM said the £224m of gross proceeds from the placing relax the constraints on William Hill’s ability to chase the US sports betting and gaming opportunity, and bring down the "uncomfortably high" leverage.

"We believe the new capital structure is capable of absorbing a possible regulatory shock (e.g. the potential imposition of £2 online slots stake limits from April 2021) and weakness in the UK retail estate," the bank said.

JPM said William Hill is now its "top pick" in the online-led gaming sector.

At 1000 BST, the shares were up 2.9% at 140.60p.