Flutter Entertainment's analyst price target has been reduced slightly to $330 from $340, as analysts cite near-term headwinds and expectations for a softer Q3. However, they continue to view the company as well positioned in the industry.

Analyst Commentary

Recent street research on Flutter Entertainment highlights a dynamic mix of optimism and caution from the analyst community. While some forecast an attractive long-term opportunity, others are wary of near-term volatility and competitive developments in the industry. Below, we summarize the core bullish and bearish takeaways from the latest analyst perspectives.

• Bullish analysts view the current pullback in Flutter’s stock price as a compelling entry point. They emphasize that the recent decline has pushed the shares well below their 52-week high, presenting potential for upside.
• Long-term growth prospects remain strong, with several noting Flutter’s continued global leadership in digital gaming and robust execution. This positions the company to capitalize on secular industry tailwinds.
• Volume growth is expected to buffer near-term headwinds. Analysts point to minimal negative impact from prediction markets and solid user engagement as indicators of lasting demand fundamentals.
• Legal and regulatory momentum appears to favor established, regulated operators like Flutter, especially as event contract restrictions persist for newer market entrants. This is viewed as an important competitive edge.

• Bearish analysts anticipate a relatively soft third quarter for Flutter, with expectations of trough revenue and EBITDA and lingering uncertainty surrounding future guidance.
• Negative outcomes in early NFL season games and associated player props have posed challenges, contributing to concerns about margin compression compared to prior expectations.
• Ongoing volatility in prediction markets is seen as a risk factor that could continue to weigh on sector sentiment and Flutter’s share price in the short term.
• Competition from prediction market entrants and evolving offerings from peers remain a potential overhang. There is caution around how these trends could affect market share and growth rates going forward.

What's in the News

• Polymarket, a competing prediction market operator, is preparing to return to the U.S. with a sports betting focus in the coming weeks. The company aims to launch initial trading by the end of November (Bloomberg).
• DraftKings has recently acquired prediction market company Railbird ahead of launching its own predictions mobile app. This move signals intensifying competition in the sector (Bloomberg).
• Kalshi, another leading prediction market operator, is raising over $300 million at a $5 billion valuation and expanding customer access to more than 140 countries. Trading volume is expected to increase significantly (New York Times).
• After Flutter Entertainment's partnership with CME Group, analysts anticipate that DraftKings may also move further into prediction markets, potentially through future acquisitions. However, concerns remain regarding regulatory impact (Jefferies note via periodical report).

Valuation Changes

• Fair Value Estimate has decreased slightly from $332.53 to $330.80, reflecting a modest downward revision.
• Discount Rate has increased marginally from 8.96% to 8.98%, suggesting a slightly higher perceived risk.
• Revenue Growth Projections have declined from 16.39% to 15.71%, indicating tempered growth expectations.
• Net Profit Margin has improved, rising from 9.96% to 10.15%, which points to stronger profitability.
• Future P/E Ratio has edged down from 31.27x to 31.09x, representing a minor valuation adjustment.