Macquarie Starts Flutter Entertainment (FLUT) at Outperform

Macquarie analyst Chad Benyon initiates coverage on Flutter Entertainment (NYSE: FLUT) with a Outperform rating and a price target of $340.00.

The analyst comments "FLUT is a rare large-cap stock in the GLL sector that meets Software's elusive Rule of 40, yet does not trade like one (Fig 16). Based on Flutter's current/pending assets (Fig 7), we see a clear line of path for six-year (2024E-30E) revs/EBITDA CAGRs of +12%/21%, fueled by an unrivaled SAM (serviceable addressable market) with a +10% CAGR to $210bn by 2030 and market share gains. If this path is executed on, our calculations show a potential ~$600 share price in a four-year time frame. • FLUT benefits from a deep moat (i.e., unique IP, high switching costs, brand loyalty), creating significant barriers to entry. The potential for inorganic growth through strategic M&A and partnerships offer upside not in our forecast. Thus, we believe FLUT is undervalued relative to its intrinsic worth, future growth prospects, and S&P 500 peers. • Since 2019, FLUT shares have seen a 23% CAGR (vs S&P 500 +16%), attributable to its major leading positions in current (US, UK/Ireland, Australia) and pending (Italy, Brazil) markets, achieved by its proven and replicable M&A strategy ("Flutter Edge"). We estimate nine acquisitions since 2019 have created ~$200 of incremental per share value for investors with a long runway from secular trends of digitization and legalization."

For an analyst ratings summary and ratings history on Flutter Entertainment click here. For more ratings news on Flutter Entertainment click here.

Shares of Flutter Entertainment closed at $274.71 yesterday.

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