08 January 2025

Flutter

Note: This is a daily stock update and the information stands true as of 08/01/25, 09:00 CET.

Company Update:

Flutter faced adverse results (ie player friendly results) notably in the NFL in November and December which will generate a negative EBITDA impact of $260m.

US revenue for 2024 is therefore now estimated to be c. $370m lower than the previous guidance midpoint at approximately $5.78bn (previous guidance $6.05bn - $6.25bn). After incremental one-off cost mitigation5, 2024 US Adjusted EBITDA is estimated to be approximately $205m lower than the previous guidance midpoint at approximately $505m (previous guidance $670m - $750m).

Outside the US, the group continues to experience good momentum, especially in the UK.

Overall, the impact for FY24 revenue and EBITDA stands at 2% and 7% respectively.

Expert Opinion:

This is the name of the gaming game: You win some and you lose some. Yet over the log run, you are better off being on the house side than on the gambler side. The impact is not that significant (7% at the EBITDA level and a one off hopefully) but considering the valuation of Flutter, the market impact could be more than that.

We still like Entain better, notably as it is a recovery story and is much cheaper than Flutter. The X-read is negative for all players including Entain but bear in mind that size of US operations at Entain are smaller (less than 20% of revenues vs 43% for Flutter. Furthermore, Entain recovery was centered on markets outside the US, which have accelerated through 2024 and should further buffer any US shock.

In all we still like the long Entain(BUY) short Flutter (SELL).