Shares in gambling group Entain rise
Shares in Entain rose by 5% after three years of the stock sliding. Is more luck on the cards for the gambling group?
Shares in Entain, the gambling group behind Ladbrokes and Sportingbet, rose by 5% this week following an encouraging update, says Dominic Walsh in The Times. Entain said that there had been “positive momentum at the start of the second half, with the pace of growth continuing in the third quarter”. Online UK and Ireland operations benefited from an acceleration in the rebound of gaming and sports betting, with volumes and margins improving.
The international and central and Eastern Europe markets also did well. All this provides a “comfortable start” for new CEO Gavin Isaacs. The trading update has definitely “put a rocket” underneath Entain’s share price, helping to restore the market’s confidence in the company’s “ability to bounce back after a patchy few years”, says AJ Bell’s Russ Mould. Recent problems include a bribery investigation and allegations that it overpaid for acquisitions that have disappointed.
The stock slid by 75% between September 2021 and August 2024. This, in turn, has led to the company being “circled by activist investors hoping to push through change and score an easy win”. As a result, so much bad news has been priced into Entain’s valuation that even “the smallest bit of positivity” has prompted a rally.
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Will Entain's luck continue?
Both the recent news and the latest rally in its share price, suggest that Entain seems to be “overcoming recent challenges”, says Derren Nathan for Hargreaves Lansdown. There are also “some attractive growth prospects to go for”, including the “relatively immature but potentially huge market for online betting and gaming” in the US, in addition to Brazil.
Note, however, that regulatory changes remain a risk “and not something that can always be predicted”, while unfavourable sporting results “can also cause financial results to disappoint, regardless of strategic progress and economic conditions”.
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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
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