DAVY VIEW

In many ways, Flutter Entertainment’s (Flutter) H1 performance followed an expected pattern. On the one hand, its Australian and US positioning continue to drive value (our estimated value of each division now increases). On the other hand, progress being made in Online is impacting forecasts more than previously expected (we reduce our group EBITDA (ex-US) forecasts by c.5% as a result). Our view on the stock remains unchanged. Flutter remains uniquely positioned in the fast-emerging US market. Furthermore, its Australian performance, coupled with scope for improvement in Online, means its core business (i.e. the group ex-US) remains attractively valued at just 12.5x 2020 P/E and 9% free cash flow yield. We reiterate our ‘Outperform’ rating.