Entain’s CFRA rating upgraded to ‘Buy’ following 2021 financial results

By Gambling Insider

CFRA Research has upgraded Entain’s stock rating from ‘hold’ to ‘buy’, following the announcement of the group’s financial results from Q4 2021. 

Entain reported relative strong  performance across the 2021 fiscal year, with group net gaming revenue (NGR) up by a modest 7% year-on-year, and online NGR climbing by 12%. Aside from Germany, all major markets saw an increase of 18%, and full-year EBITDA is anticipated to fall between £875m – £885m ($1.19bn – $1.2bn), ahead of previous expectations. 

Following the announcement, financial research and analytics firm CFRA has upgraded Entain’s stock rating, advising potential investors of the operator’s profitability in the stock market.  

Andrew Tam, Senior Equity Research Analyst, CFRA Research, commented: “We upgrade our rating on Entain to Buy from Hold, but with a lower £21 (£24) target. Entain’s Q4 2021 has shown a continued moderation as Entain cycled the strong Q4 2020. 

“Q4 2021 Net Gaming Revenue growth remained steady vs. Q3 at 4% year-on-year overall as online normalised (-9% year-on-year), offset by a recovery in Retail revenues (+60% year-on-year). This left 2021 NGR of just 7%. Entain argues the slowdown is temporary, with online growth set to resume by H2 2022, while its JV BetMGM business continues to grow.” 

CFRA’s stock ratings usually run on a three-point scale, advising potential investors to ‘sell’, ‘hold’ or ‘buy’ stock in a particular company. That Entain’s stock has been upgraded is a boost to the company’s projections for the year ahead. 

As part of the trading announcement, Jette Nygaard-Andersen, Entain CEO, commented: "2021 has been a successful and eventful period for Entain, and our market-leading platform has driven another year of strong, sustainable and diversified growth. All of our major markets have performed well.”

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