Ladbrokes owner Entain had its target price slashed by Peel Hunt after the broker made amendments to some of its valuation metrics.
Analysts at the brokerage said its target price is calculated “based on a sum of the parts approach and we have changed three inputs.”
Entain’s online adjusted underlying multiple has been lowered from 9x to 8x by the broker, with Peel Hunt believing sub-sector multiples have fallen and macro risks persist in the UK.
The second change relates to Entain’s stake in its US joint venture, BetMGM, having fallen in value due to sterling strength.
Finally, Peel Hunt said it is introducing a £300mln estimated liability in relation to the deferred prosecution agreement that Entain hopes to negotiate with HMRC.
Entain’s target price was cut to 1,700p from 1,900p, although the broker maintained its 'Buy' rating.