Playtech, the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst James Wheatcroft from Jefferies maintained a Buy rating on the stock and has a p395.00 price target.
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James Wheatcroft has given his Buy rating due to a combination of factors that highlight Playtech’s strong performance and potential for growth. The company’s core B2B business has shown ongoing momentum, particularly bolstered by favorable sports results from its associate, Caliente Interactive, in which Playtech holds a 31% stake. This has led to an outperformance in the first half of the year compared to Jefferies’ EBITDA estimates, suggesting a potential increase in consensus EBITDA forecasts for the full year.
Despite the anticipated muted share price reaction due to the favorable sports margin being the primary driver of the beat, the rebound in Caliente’s performance is seen as a positive sign. Additionally, Playtech’s valuation remains attractive with a low EV/EBITDA multiple, and the company’s strategic investments in its customers add significant value. The recent trading update further supports this positive outlook, with continued strong momentum across B2B and better-than-expected contributions from associates.