Source: Sharecast
The company, which owns a 50% share of the US joint venture BetMGM with MGM Resorts, said net revenue growth (NGR) in the second quarter so far was consistent with the 34% year-on-year surge seen in the first three months of the year.
As a result, BetMGM revenues are now expected to be "at least $2.6bn", up from the previous $2.4bn-2.5bn range, and EBITDA is forecast to be "at least $100m", compared with earlier guidance of above breakeven.
Shore Capital said that, after such a strong first quarter, an upgrade to full-year NGR was to be expected, and while comparatives get tougher in the second half, "a beat to the $2.6bn is likely".
Entain said the trading momentum at BetMGM reinforces its confidence in future growth prospects and its $500m EBITDA target for the division in the coming years – something that Shore Capital said isn't yet reflected in the current share price.
"Entain trades on a current year PER of 15x and an EV/EBITDA of c7.5x excluding BetMGM. Valuing BetMGM at c2-3x NGR would value “core” Entain on a single-digit PER. The current valuation failing to reflect the improving trends at both 'core' Entain and its 50% stake in BetMGM," the broker said.
Berenberg downgraded Energean on Monday to ‘hold’ from 'buy', citing uncertainty caused by the increased geopolitical risk and deteriorating security situation in Israel.
The company confirmed on 13 June that it had been ordered by the Ministry of Energy and Infrastructure to halt production from its Karish gas field, 90km offshore Israel.
"We have not made any changes to our forecasts at this stage; however, with energy infrastructure appearing to be targeted by both sides in the conflict (the Bazan oil refinery in Haifa has been affected, for example), we believe it is right to take a prudent approach and downgrade Energean to hold," said the German bank.
Berenberg, which kept its price target on the stock at 1,000.0p, pointed out that Energean's Karish gas field accounts for 74% of its 2025 production forecasts, rising to roughly 80% from 2026. It also accounts for around 80% of the bank's total asset NAVs, before any adjustments for net debt.
"We understand the company is exploring its options and believes it would be insulated from any penalties under its gas sale and purchase agreements (GSPAs)," it said. "However ... if Karish is shut-in for an extended period, this could potentially have a meaningful impact on our production and cash flow forecasts."