La Francaise des Jeux SA: Strong Revenue Growth and Strategic Resilience Justify Buy Rating

Analyst Sabrina Blanc of Bernstein reiterated a Buy rating on La Francaise des Jeux SA (FDJ – Research Report), reducing the price target to €41.80.

Sabrina Blanc’s rating is based on several positive developments for La Francaise des Jeux SA. The company reported a significant increase in revenue growth for FY24, driven by strong performances in both the lottery and sports betting divisions, as well as contributions from the acquisition of Kindred. This growth exceeded both Bernstein’s and market expectations, showcasing the company’s robust operational capabilities.
Moreover, the company’s EBITDA margin also surpassed guidance, leading to a higher-than-anticipated free cash flow, which facilitated a substantial dividend payout. Despite the challenges posed by new gaming tax regulations in France and the Netherlands, FDJ has outlined strategies to mitigate these impacts. With guidance for continued revenue and EBITDA growth in FY25, Sabrina Blanc sees a promising outlook for the company, justifying the Buy rating.

In another report released on February 17, Kepler Capital also maintained a Buy rating on the stock with a €46.00 price target.

FDJ’s price has also changed moderately for the past six months – from EUR38.020 to EUR33.540, which is a -11.78% drop .