Deutsche Bank has reiterated its 'buy' rating on Entain PLC (LSE:ENT), citing a stronger-than-expected performance at its US joint venture BetMGM, which it says is on track to meet 2026 targets and now offers a clearer path to cash returns.
Net revenue at BetMGM rose 33% year-on-year to $2.796bn, ahead of both company-compiled consensus of $2.772bn and previous guidance of “at least” $2.75bn.
Fourth-quarter revenue grew 39%, a marked acceleration from 23% in the third quarter, driven by a 280 basis point improvement in hold margin.
iGaming revenue rose 24% in the year, with 18% growth in the final quarter. Online sports betting increased 63%, including a 93% rise in the fourth quarter. BetMGM now holds a 13% gross gaming revenue market share in jurisdictions where it operates, comprising 21% in iGaming and 8% in online sports.
Full-year EBITDA came in at $220m, more than double the prior year and 10% above consensus expectations of $198m. Deutsche Bank’s own forecast had stood at $207m. The result also comfortably beat the “approximately $200m” target set in October.
BetMGM also paid its first dividend of $270m, or $135m to each parent company. This was $70m higher than guidance, equating to roughly 4p per Entain share, according to Deutsche Bank.
Analyst Richard Stuber noted that the results support Entain’s 2026 ambition for BetMGM to achieve positive cash flow and sustainable profitability. He maintained a 1,029p target price for the shares. The shares were off 4% at 620.2p.