Shares of the UK-based Entain PLC (GB:ENT) gained nearly 5% as of writing, as the company upgraded its guidance for FY24 after achieving strong results for Q3. The company now expects its EBITDA (earnings before interest, tax, depreciation, and amortization) to reach the upper end of its £1.04 billion to £1.09 billion guidance range. Additionally, Entain expects its online net gaming revenue (NGR) to grow at a mid-single-digit rate in constant currency, up from its previous forecast of low single-digit growth.
Entain is a gaming and sports betting company with popular titles, including Bwin, Ladbrokes, Partypoker, and PartyCasino.
Entain Delivers Q3 Performance Ahead of Expectations
Entain is also looking at a strong year-end finish after a solid performance in the third quarter. The company reported a 10% increase in NGR on a constant currency basis, driven by growth across major markets. This growth was also attributed to strong betting activity on major sports events like the English Premier League and the NFL.
Among Entain’s segments, the UK and Ireland unit’s NGR increased 2%, supported by a 6% rise in online revenues that offset a 2% decline in retail. Meanwhile, international online NGR grew 7% on a reported basis, despite a 1% drop in retail.
Jefferies Confirms Buy Rating on ENT Stock
Following the update, James Wheatcroft from Jefferies reiterated a Buy rating on the stock. Wheatcroft predicts a growth rate of 54% in the share price.
Wheatcroft is optimistic about the company’s future, as reflected in its upgraded guidance. He further added that the upgrade follows the new CEO’s arrival, boosted by strong online growth in the UK, Ireland, Brazil, and other key markets. Entain’s CEO, Gavin Isaacs, joined the company on September 2.
Is Entain a Good Stock to Buy?
Despite the progress, Entain is struggling with increased competition and regulatory challenges. Earlier this week, Entain shares fell 15% due to speculation that Britain’s finance minister Rachel Reeves may increase taxes on gambling companies in her upcoming budget on October 30. Year-to-date, ENT stock has fallen by 24%.
According to TipRanks consensus, ENT stock has received a Moderate Buy rating, backed by six Buy and four Hold recommendations. The Entain share price prediction is 938.57p, which is 25.5% higher than the current trading levels.
