The bank has abandoned its bearish stance and moved to a 'hold' recommendation after the shares lost around on-eighth of their value over the last month.
Shares now trade at 148p, close to HSBC's 150p price target.
The broker said reported revenue growth has been around 20% for both firms over the last five years, stating the combination “is a good fit”.
It added that, with “Paddy Power’s distinctive brand targeting the recreational customer and Betfair attractive to more sophisticated, price-sensitive customer,” the merger looks to be a good bet.
Nomura reckons the new target price of Betfair could be as high as 3,450p, as it bumped up the bookie to ‘neutral’ from ‘sell’.
Its enthusiasm does not extend, however, to advocating purchasing the shares as the stock is trading at a premium to its peers; 'hold' is the commendation, though the price target has been pushed up to 430p from 410p.
The same broker has upped its price target for accountancy software titan Sage (LON:SGE) to 710p from 670p, saying the firm is regaining its technology mojo.
“FY15E results underpinned the key aspects of our positive view on Sage. X3 and SageOne are performing well and taking share, while initial feedback on the new Sage Live product built on Salesforce's platform is strong. Management are buzzing and momentum is strong. The reporting changes are logical and innocuous. We believe investors should be on this journey,” Jefferies said, reiterating its 'buy' recommendation.
Getting the downgrade treatment this morning are InterContinental Hotels Group (LON:IHG), where Berenberg has moved from 'buy' to 'hold' even as it hiked the price target by a quid to 2,850p; JD SportsFashion (LON:JD.), where Peel Hunt has gone from 'buy' to 'hold', despite lifting the price target to 1,150p from 1,100p; and Rolls-Royce (LON:RR.), where Bernstein has cut its rating to 'under-perform' from 'market perform'.
In the small cap space, Broker Cantor Fitzgerald noted DekelOil’s news that its debt has reduced by €5.1mln, improving the economics of its 51%-owned Ayenouan palm oil project in Cote d'Ivoire.
“While in theory DekelOil loses outstanding capital contributions from the minority, we had not included these in our forecasts so there is an overall increase in value,” the broker said.
Restating its ‘buy’ advice, Cantor said the stock was worth 2p a share, up from 1.75p previously.