Last Update 05 Dec 25

Fair value Decreased 5.69%

ENT: Upcoming UK Gaming Tax Changes Will Drive Future Share Performance

The analyst price target for Entain has been trimmed modestly, with a slightly lower fair value and revenue growth outlook partially offset by a firmer profit margin profile, as analysts factor in higher UK gaming taxes and a maturing U.S. market, yet still see value in the shares at roughly a mid single digit percentage discount to prior expectations.

Analyst Commentary

Street research remains broadly constructive on Entain, with several bullish analysts highlighting a more attractive entry point after the recent share price pullback, even as higher UK gaming taxes and a slowing U.S. market temper headline targets.

Across the recent notes, target price revisions have been modest and mixed, reflecting both incremental tax headwinds and ongoing confidence in Entain’s ability to execute on its omnichannel and online growth strategy.

Bullish Takeaways

Bullish analysts frame the recent share price selloff as overdone relative to fundamentals, arguing current levels already discount UK tax risks and a maturing U.S. opportunity.
Several buy rated updates, including fresh upgrades, emphasize that long term growth in online betting and gaming, as well as Entain’s diversified geographic mix, can still support mid to high single digit revenue growth.
Incremental target price increases from major houses such as JPMorgan, even when accompanied by Neutral ratings, signal confidence in the company’s ability to defend margins and cash flow despite regulatory headwinds.
Reiteration of positive stances from multiple bullish analysts underscores a view that the risk reward profile has skewed more favorably, with upside potential if regulatory conditions stabilize and execution in key markets remains solid.

Bearish Takeaways

Bearish analysts point to the UK budget’s higher than expected blended gaming tax rate as a structural headwind that could compress margins and limit near term earnings growth, pressuring valuation multiples.
There is concern that higher iGaming taxes may push some UK customers offshore, adding uncertainty around future revenue trajectories and increasing execution risk in Entain’s core domestic market.
Target price cuts from some firms, even where ratings remain positive, reflect a more conservative stance on both UK and U.S. growth, with expectations that the U.S. market will continue to decelerate from earlier high growth phases.
Differences in taxation between sports betting and iGaming are seen as potentially distorting market dynamics, introducing additional policy risk that could complicate long term planning and capital allocation decisions.

What's in the News

Entain reiterated its 2025 earnings guidance, targeting approximately 7% Online NGR growth on a constant currency basis and mid single digit growth on a reported basis (Key Developments).

Valuation Changes

Fair Value was trimmed modestly from 11.63 to 10.96, implying a slightly lower intrinsic valuation for the shares.
The Discount Rate edged down marginally from 10.23% to 10.20%, reflecting a very small reduction in perceived risk or required return.
Revenue Growth was reduced from 5.22% to 4.61%, indicating a more conservative outlook for top line expansion.
Net Profit Margin increased slightly from 10.71% to 10.96%, suggesting a firmer margin profile despite softer growth expectations.
Future P/E was lowered from 15.45x to 14.46x, pointing to a modest de rating of the shares on forward earnings.

Data-driven marketing, tech innovation, and omnichannel partnerships are boosting customer engagement, retention, and margins while strengthening Entain's competitive advantage.
Regulatory shifts and broader digital adoption in key markets are increasing Entain's long-term growth opportunities and revenue potential through expanded market access.
Regulatory pressure, market saturation, intense competition, and rising costs may limit profit growth and challenge Entain's ability to expand or sustain market share.

Catalysts

About Entain

Operates as a sports-betting and gaming company in the United Kingdom, Ireland, Italy, rest of Europe, Australia, New Zealand, and internationally.What are the underlying business or industry changes driving this perspective?

Increasing user engagement and retention, along with growth in player acquisition for both iGaming and online sports betting, is being driven by more efficient, data-driven marketing and product innovation (e.g., enhanced app speed, live dealer content, cross-selling tools); this is supporting higher top-line revenue and improving net margins.
The broader societal trend of online entertainment adoption-fuelled by digitalization and normalization of online betting-remains a tailwind, as reflected in 38% growth in monthly actives and players engaging 34% more days per month, which is likely to boost future customer lifetime value and long-term revenue.
The ongoing liberalization and regulation of sports betting and iGaming in North America, with new states such as Missouri and Alberta expected to launch, creates a meaningful option value for Entain as its existing OSB player base can be efficiently migrated to iGaming, expanding the addressable market and long-term revenue potential.
Long-term investment in proprietary technology platforms (AI-driven player management, trading tools, and personalization) is enabling more profitable customer acquisition, better player economics, and operational leverage; this is expected to drive EBITDA growth and margin expansion over time.
The deepening omnichannel partnership with MGM Resorts, including exclusive content and a strong cross-state loyalty ecosystem, is driving higher-quality customer acquisition and engagement, thus reinforcing Entain's competitive moat and supporting earnings and cash generation that could soon allow for capital returns to shareholders.

Entain Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Entain's revenue will grow by 5.4% annually over the next 3 years.
Analysts assume that profit margins will increase from -10.6% today to 10.0% in 3 years time.
Analysts expect earnings to reach £605.7 million (and earnings per share of £0.56) by about September 2028, up from £-549.1 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 16.1x on those 2028 earnings, up from -9.9x today. This future PE is lower than the current PE for the GB Hospitality industry at 16.9x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 10.17%, as per the Simply Wall St company report.

Entain Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Increasing regulatory scrutiny and recent rises in gaming tax rates (e.g., New Jersey and Illinois) present persistent cost headwinds and operational complexity, which may compress net margins and limit bottom-line growth-even as revenue rises.
The future of new state iGaming legalization remains uncertain, and while long-term liberalization is anticipated, slow or stalled legislative momentum could structurally cap BetMGM's (and thus Entain's) addressable market and revenue growth.
Adjacent sector competition (e.g., sweeps and prediction markets), the rise of unregulated alternatives, and potential disruptive new entrants (such as technology or crypto firms with larger liquidity pools) may threaten market share and put pressure on customer acquisition, retention, and pricing power, impacting revenue and profitability.
Reliance on high-quality player acquisition and continually increasing marketing efficiency faces diminishing returns as mature markets reach saturation; future growth will increasingly require costly expansion or innovation, raising customer acquisition costs and pressuring long-term earnings.
Rising capital intensity for state launches and compliance, coupled with volatile promotional costs and normalization of EBITDA flow-through rates post-marketing recalibration, may lead to less impressive future margin expansion and lower free cash flow available for shareholder returns.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of £11.387 for Entain based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of £14.0, and the most bearish reporting a price target of just £9.45.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be £6.0 billion, earnings will come to £605.7 million, and it would be trading on a PE ratio of 16.1x, assuming you use a discount rate of 10.2%.
Given the current share price of £8.52, the analyst price target of £11.39 is 25.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Adjust Entain Price Targets Amid Improved Margins and Nuanced Outlook