Three key reasons are driving the current surge in the online gambling industry: insulation from macroeconomic headwinds, the ongoing legalization in various territories, and the growing confidence in increased profits in the United States.
Jefferies, a prominent investment bank, highlights the continued focus of investors on Flutter as they recognize the significant advantages of being a market leader in the online space. Meanwhile, Lottomatica remains Jefferies’ top pick among small and medium-sized companies.
The analysis also mentions Evolution, with Jefferies maintaining a buy rating and a target price of 1,760 SEK, representing a substantial premium as the stock is currently trading around 915 SEK. Jefferies’ rationale includes the low valuation, potential for further cash returns to shareholders, and the potential legalization of iGaming in the US.
Additionally, Jefferies recommends buying Better Collective with a target price of 275 SEK per share, indicating a 135% upside potential. The investment bank believes in the significant growth trajectory of Better Collective’s business model, positioning it as a leading affiliate model for global online gaming and sports.
Kambi is also a buy according to Jefferies, with a target price of 155 SEK, offering a 50% upside. Factors contributing to this recommendation include a low valuation (ev/ebitda of 3.9 times expected 2025) and positive remarks from the new CEO, Werner Becher, who aims to expand the total addressable market by leveraging his industry experience from both B2B (Sportradar) and B2C (Interwetten) operations.
In conclusion, the online gambling sector is poised for continued growth and investment opportunities, driven by a combination of market dynamics, regulatory changes, and strategic vision from key players in the industry. Investors are advised to consider these factors and the recommendations from leading analysts to capitalize on the potential upside in this thriving market.