Entain PLC (LSE:ENT) shares climbed off recent lows after the appointment of a new CEO was welcomed by investors and analysts.
Stella David, former chair of the bookmaker, who was standing in as interim CEO for the second time recently as boardroom musical chairs continued, has now been given the job on a permanent basis.
"We consider Stella a safe pair of hands, favoured by shareholders," said analyst Ivor Jones at Peel Hunt.
Greg Johnson at Shore Capital said David was viewed as "having been central to the ongoing turnaround over the last 18 months and hopefully puts an end to the executive merry-go-round".
Jones said the group's first-quarter results, also published today, were "solid", with net gaming revenue (NGR), excluding the US, increasing 10%, but helped by favourable sports results.
"However, as the year progresses, we expect comparisons will become tougher," Jones added. "As a result, we believe it is prudent to maintain our current forecasts despite the strong YTD performance."
Shore Cap's Johnson said the Q1 growth was "sharply above expectations" and "gives increasing confidence over not only full year guidance and if not its medium-term aspirations for EBITDA of >$500m then that at least it has a positive equity valuation".
He said if Entain delivers its $500m-plus EBITDA medium-term target (and potentially onwards beyond $1 billion) this "could be worth circa 450p per Entain share" or circa three times NGR.
The trading statement followed on from yesterday’s Q1 update from BetMGM, the 50%-owned US joint venture.
Analysts at Citi said the US JV numbers were "very strong", with revenue momentum accelerating despite customer friendly results Stateside, and that the results had "upside potential to EPS".
Net revenue of $657 million was 17% above Citi forecasts despite adverse March college basketball results, with 34% growth compared to 0% in the final quarter of last year and iGaming net revenue up 27%, accelerating from 17%.
In online sports betting, BetMGM posted a net win margin of 4.8%, ahead of Citi's forecast of 4.0%, the Q4 result of 3.3% and Q1 last year of 3.7%.
This 110 basis points increase is driven by a -50bps decrease in gross win margin to 8.2% and an -150bp decrease in promotional intensity.
Entain shares rose 9% on Monday, and another 3% to 647, continuing their recovery having fallen below 500p earlier this month, to a five year low below 455p.