Flutter's resilience during economic downturns, coupled with various favorable factors, is affirmed by financial analysts, according to recent reports.
Jefferies analyst James Wheatcroft has resumed coverage of Flutter Entertainment (NYSE: FLUT), rating it as a "buy" with a $380 price target. This optimistic stance is primarily based on Flutter’s resilient digital business model, international expansion, and strong financial health, as well as potential benefits from inclusion in major stock indices like the S&P 500.
Recession Resilience
Wheatcroft views Flutter’s digital-heavy revenue stream as highly resilient during economic downturns. Over 90% of the company’s revenue comes from its online platform, a factor that insulates it from macroeconomic stress [1][2].
International Exposure and Growth
Flutter is expanding beyond its U.S. base, bolstered by strategic acquisitions such as Italy’s Sisal Gaming and a majority stake in Brazil’s NSX Group. These moves enhance its presence in high-growth international markets like Europe and Latin America, which Wheatcroft believes investors are underestimating [1][3].
Strong Financials
Flutter maintains manageable debt levels and pursues a robust share repurchase program, strengthening shareholder value and financial stability in volatile markets [1][2][3].
Potential Stock Market Index Inclusion
Wheatcroft suggests that Flutter’s potential inclusion in indices like the S&P 500 could further increase demand for the stock and support its valuation [3].
Operational Adjustments
Despite recent slower U.S. sports betting growth, Jefferies attributes this to strategic advertising cutbacks and product fine-tuning rather than fundamental business weakness [2].
Advantage Over Competitors
Flutter’s international exposure represents a potential advantage over some competitors, such as DraftKings, which operate solely in North America.
Long-Term Growth Prospects
The new Street-high $380 price target for Flutter is DCF-based to reflect the long-term US opportunity. Flutter’s free cash flow yield could reach 5% by the end of next year and double to 10% by the end of 2030 [4].
Jefferies has set a Wall Street-high price target of $380 for Flutter Entertainment, implying upside of approximately 35% from today’s close [4].
[1] Flutter Entertainment's high online exposure accounts for 91% of its revenues. [2] Flutter has added a majority stake in Brazil's NSX Group and purchased Italy's Snai, deals that add exposure in two of the world's premier gaming markets outside the US. [3] The stock symbol for Flutter Entertainment is NYSE: FLUT. [4] Flutter is known as the owner of FanDuel to American bettors and investors. [5] Flutter's share repurchase program could amount to as much as $1 billion this year. [6] Flutter Entertainment's shares are up 9.44% year-to-date. [7] Flutter International's exposure could potentially boost the stock. [8] James Wheatcroft believes that the recent lethargy in Flutter's US handle growth is more the result of the operator reducing promotional spending and an evolving product lineup rather than a sign of weakness in the broader economy. [9] The reason for James Wheatcroft’s bullishness on Flutter Entertainment is due to its recession resilience. [10] Flutter could return as much as 60% of its current market capitalization to investors by 2030, according to Wheatcroft. [11] The analyst’s conclusion implies that International trades on 10x EV/EBITDA vs 13.5x historically. [12] The analyst, James Wheatcroft, notes that market participants may not be fully appreciating the ex-US opportunity set offered by Flutter. [13] Flutter Entertainment has a solid balance sheet with 2.2x leverage and an ongoing buyback. [14] Flutter Entertainment generates 59% of its revenues outside its main market. [15] Flutter's international exposure represents a potential advantage over some competitors, such as DraftKings, which operate solely in North America. [16] The analyst, James Wheatcroft, concludes that valuing the US at a 20% premium to DraftKings and International in line with S&P 500 consumer discretionary peers implies a $350 sum-of-the-parts price for Flutter. [17] The new Street-high $380 price target for Flutter is DCF-based to reflect the long-term US opportunity.
- Jefferies analyst James Wheatcroft views Flutter's digital-heavy revenue stream as highly resilient during economic downturns due to its online platform, which accounts for 91% of the company's revenue, insulating it from macroeconomic stress.
- Flutter is expanding its presence in international markets like Europe and Latin America through strategic acquisitions, such as Italy’s Sisal Gaming and a majority stake in Brazil’s NSX Group, which Wheatcroft believes investors are underestimating.
- Flutter maintains manageable debt levels and pursues a robust share repurchase program, strengthening shareholder value and financial stability in volatile markets, as noted by Jefferies.
- Wheatcroft suggests that Flutter’s potential inclusion in indices like the S&P 500 could further increase demand for the stock and support its valuation, given its recession resilience and long-term growth prospects.
