Ladbrokes and BetMGM owner Entain plc’s interims showed a “surprisingly early return to net gaming revenue growth”, said analysts at broker Shore Capital Markets.
Shore Cap highlighted that online revenues returned to growth in the second quarter, exceeding earlier forecasts.
This was “somewhat encouraging” given “the difficulties of the last 18 months to two years”, said analysts.
Entan’s group EBITDA came in at £534 million, up 5% and “in line with market expectations”, said analysts, adding: “The period benefited from the inclusion of M&A last year, with underlying profitability in the period down, reflecting the ongoing challenging backdrop in certain markets.”
“Given how much negativity appears to be baked into the share price, we see today’s update as a result,” they said, giving Entain stock a buy rating.
UBS also saw many positives in Entain’s results, with the bank’s analysts stating: “Given the healthy H1 beat on both bottom line and top line, in addition to revenue and profit guidance upgrades we would expect a positive reception from the market today.
“Entain is now guiding to a return to positive organic growth in its online division, as well as a stabilisation in earnings expectations, both of which the equity story greatly needed, in our view.”
UBS gave Entain shares a neutral rating with an 840p price target.
Shares were swapping for 568.3p following an 8.5% rally on Thursday.