Deutsche Bank has boosted its price target for online gaming and sports betting software firm Playtech PLC (LON:PTEC) in the wake of the firm’s €846mln acquisition of Italian rival Snaitech.
The German bank reiterated a ‘buy’ on the stock and increased its target for the FTSE 250-listed firm to 1,300p, from 1,070p previously.
READ: Playtech cheers the City with €846mln acquisition of Italian rival Snaitech
It said the new target offers around 60% upside potential to the current share price of 799p – which at Thursday lunchtime in London was up 0.8% on Wednesday’s close.
In a note to clients, Deutsche Bank’s analysts said: “The long-awaited deal catalyst has now arrived, with a consequent improvement in balance sheet efficiency, material earnings accretion and medium-term re-rating opportunity (less unregulated market exposure; online growth opportunity).”
They added: “PTEC has been instrumental in multiple retail to online convergence agendas for its B2B customers. The Snaitech acquisition means that PTEC now has a principal position.”
In 2017, Snaitech generated underlying earnings (EBITDA) of €136mln on revenue of €890mln.
Playtech expects to extract material annual cost synergies of €10mln as well as revenue synergies.