Flutter Entertainment PLC's (LSE:FLTR, NYSE:FLUT) latest quarter has prompted a tidy round of number-crunching at Citi, and the conclusion is that the near-term picture has lost a little of its shine.
The broker has cut earnings and revenue forecasts after the group’s third-quarter results fell short, and after management warned that unhelpful sports outcomes in the fourth quarter would dent both its US and international operations.
Citi now expects revenue to slip 2% in 2025 and 1% in 2026 compared with its previous model. The reductions are steeper further down the profit and loss account.
Adjusted EBITDA forecasts come down by 10% for both 2025 and 2026, and adjusted earnings per share are trimmed by 11% and 14% respectively.
The broker attributes the heavier downgrades to a combination of unfavourable sporting results, increased spending in the US sportsbook and investment in FanDuel Predicts, the new prediction-based product launching in December.
That product, though still in its infancy, has a meaningful role in Citi’s revised thinking. FanDuel Predicts, which allows users to take positions on real-world outcomes without traditional betting structures, is forecast to scale into a sizeable revenue stream.
Citi assumes average annual staking of $664 per adult in non-online-sports-betting states by 2028, translating into roughly $26.2 billion of volume. Applying a 2% commission rate, split evenly between buyers and sellers of each contract, yields gross revenue estimates before revenue-share payments.
Those assumptions help shape the broker’s long-term outlook even as they weigh on near-term investment and margin expectations.
The tweaks across the model feed into a reduced sum-of-the-parts valuation. Citi cuts its target price from £268 to £254 but keeps its buy rating, arguing that the broader growth case for Flutter, particularly in the US, remains intact despite the bumps in this year’s sporting calendar.