It seems quite apt that on the day William Hill (LON:WMH) confirmed it is in £4.4bn merger talks with the Canadian giant Amaya Inc (TSE:AYA) that the analysts at Deutsche Bank have taken a closer look at London’s listed bookies.
The German bank retains its ‘buy’ on William Hill despite City-wide scepticism over the potential deal, while it has upgraded Ladbrokes (LON:LADB) to ‘buy’ from ‘hold’, with the latter’s target price bumped up to 170p from 148p.
Deutsche also initiated coverage on Paddy Power Betfair (LON:PPB) with a ‘buy’ and price target of 1,050p, representing 20% upside to the current price.
Playtech (LON:PTEC) is also a ‘buy’ and the valuation of 1,175p suggests the stock could advance 24%, while GVC (LON:GVC) is ‘buy’ up to 850p.
“We model various scenarios for each company including the powerful combination of compounding revenue growth and operational leverage; more efficient balance sheets via potential acquisitions and share buy-backs; and, further re-rating potential as online exposure grows,” Deutsche said in a note to clients.