Entain

Core ENT in line, but BetMGM weak

Entain’s (ENT) key Online division saw underlying net gaming revenue (NGR) declines of 2% in Q1, broadly in line with guidance and expectations. BetMGM's performance was weak, with Q1 NGR up 2%, or high single digits adjusted for results. We see little change to consensus expectations for FY24 in core ENT, but BetMGM is tracking behind our full year growth expectations. The US operation will need a very strong conclusion to the year to meet our FY revenue growth expectations (+c.18%). ENT trades on a group multiple of c.9x EV/EBITDA, or c.7x when adjusted for the value of its stake in BetMGM. Although there is much speculation about asset disposals and other corporate activity, we still see the most tangible source of a re-rating as a return to underlying growth in the core online business and evidence that investments and refreshed product in BetMGM are starting to pay dividends.

• Paul Ruddy
• Morning briefing
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