Despite its share price underperformance so far this year, it's still too early to take a punt on High Street bookies Ladbrokes (LON:LAD), reckons heavyweight European broker EXANE BNP Paribas.
It thinks the market is expecting too much, too soon, from the group's online strategy and cuts its target price for the stock to 170p a share from 175p previously.
Analyst Roberta Ciaccia adds that another spanner in the works is the likely continued slowdown of growth in gaming machines as seen over the last two quarters.
"We believe that the current share price implies £86mln of EBITDA from the online business in full year 2014.
"This may be in line with the initial terms set out in the Playtech agreement but it also means that online EBITDA will need to more than double from our estimate for full year 2113, and to rise by a further 40% in 2015," the analyst highlights.
"We don’t doubt the validity of Ladbrokes’ online strategy, but we see a 9% market share in 2015 as more realistic," adds the analyst.
The broker sticks to its 'underperform' rating and says it considers the main risk to this rating will be an upward change in the online business trend, "but we think that this is unlikely before at least Q1 2014".