Flutter stock keeps stacking momentum on Wall Street, as several banks have once again raised their target price, citing FanDuel.
Citizens JMP raised its Flutter stock price target to $299 from $287, keeping its outperform rating, while Bank of America raised its target to $310 from $300, maintaining a slightly more bullish buy rating on the FanDuel parent.
“Flutter’s U.S. business deserves a premium multiple to its online peers in the U.S.,” Jordan Bender of Citizens JMP said in an analyst note.
Flutter stock surge continues
The stock surged to a new high this week after Flutter announced third-quarter earnings, marked by robust growth and comparatively modest cuts to its short-term US guidance — demonstrating resilience to industry headwinds.
That momentum continued Thursday, as Flutter stock kept climbing to $269.84, up 8.7% from its earnings announcement Tuesday.
FanDuel better positioned than peers?
Chief FanDuel competitor DraftKings recently cut year-end guidance significantly due to an unusually long streak of favorites winning in the NFL. The results hit DraftKings for $175 million, though $55 million of that was offset through marketing tweaks.
Flutter acknowledged the industry-wide problem but announced it should only impact FanDuel by $30 million after taking measures to mitigate via pricing and driving higher-margin bets, like parlays.
In addition, the strength of its 14 brands outside of the US, which Bender described as “cheap given its size and scale over its peers,” prompted Flutter to raise the entire company’s guidance for FY2024 by $30 million.
‘Tech prowess’ enables ‘best-in-class’ hold
FanDuel has consistently widened the mix of bets it takes in the form of parlays — multiple bets paired together with much lower odds of hitting. Those bets account for 70% of all wagers on the NBA and NFL, the company announced during a recent investor event in New York. At that event, FanDuel doubled its sports betting market cap for 2027 to $63 billion and raised its long-term hold goal to 16% by 2030.
“Despite being theoretically more exposed to sports results vagaries than peers, given a bigger sportsbook and higher parlay mix, Flutter’s tech prowess allows it to grow its already best-in-class structural hold rate faster than the market,” Adrien de Saint Hilaire of Bank of America said in an analyst note.
He added that “benefits of scale and experience allow it to use the buffer of promotion depending on sports results outcomes,” and cited market share gains Flutter said it is already seeing in Q4.
