Flutter Entertainment PLC (LSE:FLTR) and Entain PLC (LSE:ENT) could see a big boost from record win margins for their US operations at the upcoming second-quarter earnings season, Citigroup said.
The investment bank's analysts used recent state data to forecast US growth in the second quarter and web traffic trends to derive forecasts outside the US.
Strong win margin and iGaming progress are expected for FTSE 100-listed, which owns Flutter in the US and Betfair and Paddy power in Britain, the analysts said.
For Flutter this led to the bank expecting positive catalysts from the first-half results, with US revenue forecasts now 7% above consensus given strong win margin and iGaming progress in Q2, as well as "a more constructive view on US EBITDA".
For rival Entain PLC (LSE:ENT), owner of Ladbrokes, Coral and others, plus a 50% stake in US-based Bet MGM, online growth for the first half as a whole is expected to be "stable" versus Q1 results, with £515m group adjusted EBITDA post all recent M&A.
"Continued promo rationalisation for BetMGM should buoy US NGR [net gaming revenue]", the analysts said, as well as profitability, with BetMGM turning EBIT-positive in the second quarter.
Flutter's interim results are scheduled for 9 August and Entain's the day after.