Paddy Power-owner Flutter Entertainment PLC (LSE:FLTR)’s $350 million acquisition of a controlling stake in Brazilian gaming company NSX Group ticks to boxes for brokerage Shore Capital Markets.
“We see this as a sensible move, further expanding and accelerating its growth profile, consistent with its expansion profile and medium-term leverage ratios,” said Shore Cap analysts.
They noted that the deal is likely to limit underlying earnings growth outside of the US in the year ahead, though the deal is “not a surprise” given the rapid pace of growth of Brazil’s newly regulated gaming market.
Regardless of the benefits, Shore Cap reckons the move is already priced into Flutter’s shares, so it has left a hold rating on the stock for now.
Markets appeared ambivalent to the acquisition, with Flutter shares moving 0.8% lower on Friday morning.