DAVY VIEW

Flutter’s (FLTR) Q3 performance is along expected lines. We are unlikely to make any change to our ex-US forecasts, even at a divisional level (note, 2019 US losses are now expected be less than previously guided). The same challenges (shifting to a more sustainable and profitable Online business) and opportunities (including in the US and Australia) remain prominent features of its current performance. Of course, the pending acquisition of The Stars Group (TSG) will only strengthen the group’s position in relation to each. In our view, the stock remains attractively valued – the core group (ex-US) is currently trading on c.11.5x pro-forma 2020 P/E (c.10x 2020 EV/EBITDA). We reiterate our ‘Outperform’ recommendation.