Flutter Entertainment’s valuation doesn’t reflect its underlying pace of growth, according to analysts at HSBC.
The broker has reiterated its 'buy' rating on the Paddy Power owner and increased its price target to 18,100p from 17,900p.
Shares joined in the market rally and were trading 3.5% higher in late trading at 14,485p.
HSBC noted while there may not have been an earnings upgrade in the recent results, the performance is on track.
“We are reassured by the underlying growth at H1, and think that this suggests our forecasts for this year and next are well underpinned,” the bank said.
“This growth is not reflected in the valuation of the group, as we see it,” it added.
HSBC has gowing confidence in the US business, while India remains an opportunity despite adverse tax rulings.
The broker is also positive on Entain, rated buy, although it cut its price target to 1,540p from 1,830p.
“Performance was more anaemic than we anticipated, though a wide range of interpretations are possible,” it said.
“We believe shares offer value, but delivery is important,” HSBC commented.