(13:15 GMT) Flutter Entertainment Price Target Announced at $320.00/Share by Goldman Sachs
That said, if I were to make an educated guess...
I'd say $281-290 is the ceiling to this nice little run we've been having.
Then, I'd expect the shareprice to retract to $250 and normalize before another run. |
I hear you (Whitehouse) for using conservative language. If it helps, I have approx 70% of my pension pot invested in Flutter ie I am deeply committed and know far more about this firm than any other. Perhaps TMI but I find it helps me to look at things through a negative lens… and hope I can’t find much. |
Double positive news for here out of Playtech am. They are repaying a 200m loan early prior to plan when they sell SNAI to Flutter. They are doing so well. Mostly in Italy. Good news for the new buy & also good news for Sisal as they must be going ok as same Italian market |
A little better than steady for NY I would suggest. 4 weeks on the bounce now at over 20m results in last 4 weeks at 95m Vs 72m helping the pain of THE bad fortnight ease somewhat FanDuel used to run free minibuses the 20 min from Times sq to Meadowlands NJ so punters could go to the races/bet with FD so some will have joined the 80pc of those who lost on knee brace Tyson 89pc of cash, inc mine, went down last night on the Steelers at -3.5 with DK so a good guide and a huge result for singles and weekend accas already down |
NY week ending 17th Nov
DK $162.7m handle $16.5m hold (10.1%)
FD $202.5m handle $22.7m hold (11.2% hold)
Steady week for FD … much better hold than usual for DK.
FYI apparently NY didn’t allow betting on the Tyson fight so any fillip from that event won’t be in these figures (indeed may have suppressed the handle a little if punters found a way to bet via another state). |
8.5m Michigan 4% hold vs DraftKings loss of -384k.
PA iGaming up 64% YoY |
More October Handle/Hold figures coming through from Pennsylvania and Michigan. FD hold rates (as we know) are well down compared to typical level but relatively very good indeed compared to DK (only really useful benchmark) who barely made anything. My only point here is that adds credibility to our CEO’s comments about FD market leading ability to accurately price risk… which maximises revenue in strong periods and minimises losses when the tide flows for the punters. |
The firm cutoff date outlined in the Amendment was that the legal sports betting market in Missouri must be a reality by Dec. 1, 2025.
However, Missouri Gaming Commission chairman Jan Zimmerman hopes it can come together faster.
“Our folks are writing the rules and regulations as we speak,” she noted last week.
"Optimistically, in order to get through all those administrative processes, we’re looking at mid-to-late summer (2025),” she added. |
Here's an update on Missouri. There was a dump of No-votes but looks like it will pass. There's some big cities still reporting with higher Yes-margin. NYTimes tracker shows the margin at 2008 votes.
"None of the eight largest voting jurisdictions, representing half the total statewide vote, have certified final results. All eight passed Amendment 2 by strong majorities."
Many smaller counties have certified their results already.
"Final state certification of the results must occur by Dec. 10. Any recount would take place after that certification." |
I don't know about those numbers but Boyd Gaming is FanDuel's primary partner.
Boyd Gaming owns 5% stake in FanDuel. You can check their online revenue growth to get a glimpse, but Boyd Gaming also runs other online operations. |
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Does anyone know how the revenue is divided with these igaming numbers? |
In better news the IGaming numbers for NJ are the highest month ever & 38pc up YoY and will remain at huge levels for the foreseeable Also last 4 weeks of NFL all above average so Nov comparisons look already certain to beat last year |
Anecdotal evidence re the early Oct NFL issue via a couple of punters who won indicates they had long shot 12 game accas for all Sunday games To quote one they had a 10 buck bet & the first 10 of 12 won. If all 12 had gone in payout was 170k but there was more time before the last 2 games which they gave them time to consider the 16k cash out option. Which they took.Game 11 would have been a loser but money in bank & too late for FDIf loser had been on any of earlier 10 simultaneous games virtually no cash out or final win |
Given the multiples we're seeing for the next 3 years, I'm not surprised.
EPS Estimates
2024 : 5.95
2025 : 8.78
2026 : 12.19 (A double in 2 years)
2027 : 15.38 (Almost a triple in 3)
New Price Target from Craig Hallum : $275 -> $350 |
Chase Coleman is one the greatest hedge fund investors. He's compounded 30% returns a year. He seems to have a talent for finding newly arising trends, like search engines, social media and such. It's no wonder he found Flutter. And that's probably because of the valuation too. He's investing in it to see the compounding returns. |
NY week ending 10th Nov
Total handle - $527m
DK $167.1m handle, $15.4m hold (9.2%)
FD $215m handle, $24.4m hold (11.3%) |
Peter Jackson,according to yesterday's Irish Times also indicating they may look at bidding for Italy's lotto ( min bid a billion euro) as a way of ' funneling'players toward their online platform. |
Fox Corporation had 7.2bn of debt and 4.1bn of cash and cash equivalents.
4.3 billion for FanDuel is a big investment for them.
They've ran Fox Bet before so they have experience of running a sportsbook and getting licensed for it. FanDuel is much easier to pitch now that it's a profitable company. |
Billionaire investor Chase Coleman's hedge fund, Tiger Global Management, filed its latest Form 13F on Thursday and disclosed its trading activity
Tiger Global opened three new positions including a $801.3 million stake in Flutter Entertainment |
FYI Jackson “ I’m not sure what the benefit is [for Fox] in exercising it at any point up to the day before it expires,” he said, adding that it will be an illiquid stake, as shares in FanDuel are not publicly traded. “ |
 Fox's option compounds at 5% a year. That means in 2030 price tag will be ~6 billion. FanDuel might be worth 50-100bn by then.
I'm not an accountant so I don't know which one is better. If Jackson is correct that it's illiquid asset, I think then your only option is to take cash flows asap since you can't sell your equity. (and on that note if Fox bought in early, they would have had to take their share of early losses for FanDuel. so makes sense to start buying in now when business is profitable)
Here's the full transcript from that conference:
Michael Ng: I wanted to ask about sports betting. FOX has an 18.6% option to acquire – sorry, an option to acquire 18.6% of FanDuel. And obviously, there's been a history with FOX Bet and things like that. And it feels like a feature that could be really additive to a video product. Could you just talk about how you're evaluating and assessing the opportunity in sports betting?
Lachlan Murdoch: We're still tremendous believers in sports betting. We think it's growing into a great business. It also drives engagement with sports, engagement with whether it's football or Major League Baseball or any of the sports that we proudly broadcast. So, we like it both from a television point of view and also, obviously, as an opportunity to further engage with our viewers.
I think Goldman Sachs has valued FanDuel as a sort of standalone business at $35 billion, which imputes a value of our option at about $2.2 billion. But this is an option that expires in 2030. So, we have six years to exercise that option, but we will exercise it. We're not going to leave $2 billion on the table. We think that, by the way, that option grows with value over the next six years.
And so, we've begun the process with state regulators around licensing. To fully monetize the option, we need to be licensed as a gaming operator, even with only 18.6%. And so, we've started that process with state regulators to begin the gaming licensing approvals. |
Well you can think of it in 2 ways:
Fox can wait and every year they get an even bigger equity discount, but they miss out on that years profits. But they have to get licensed so they can't wait forever. Flutter is projecting 2027 US EBITDA of 2.7bn (pre-Missouri), so that's 446m potential profits for Fox with 18.6% equity share.
It is true that if you compare DraftKings vs FanDuel, FanDuel can't keep all of its profits, so there's a discount to the company. Regardless of that, FanDuel can probably outperform DK and make up for it.
And for sure with 2bn on the line, you can spend a hundred mil or two on lawyers.
Ultimately it comes down to how Fox can improve FanDuel's performance as minority owner. |
Thanks for raising this important point Lappuliisa. The Fox situation is an annoying wrinkle as hard to analyse (with my limited skillset anyway). I often wonder whether the sellside analysts are factoring it into their models when they set their price targets (and what assumptions they are making). I simply have no idea how likely Fox are to be able to execute although I guess with a £2bn ish upside they will likely find a way. |
This explains it, an article from 13th September 2024:
Fox Corporation CEO Lachlan Murdoch (pictured) announced that the media conglomerate is proceeding with its intention to activate an 18.6% stake option in FanDuel.
According to Sportico, Murdoch valued Flutter-owned FanDuel at approximately $35bn during his appearance at the Goldman Sachs Communacopia and Technology Conference on Tuesday (10 September).
This valuation implies that Fox’s potential share would be worth around $6.5bn on the open market, compared to the $4.3bn Fox expects to pay to activate the stake initially acquired through its investment in The Stars Group (TSG).
One potential challenge for Fox is obtaining the necessary gaming operator licences.
Murdoch assured that the company is actively engaging with state legislators to address this issue, stating: “We’re not going to leave $2bn on the table.”
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It is nice to see that they're planning to exercise that option early and that we don't have to deal with this Fox Option BS much longer.
Fox minority stake would have to imply some form of media deal between Fox and Flutter. Fox also owns 2.4% of Flutter shares. |
I noted that during the conference call Jackson was quite skeptical about Fox exercising their option. He told the analyst to "ask the shareholders of Fox". He noted that Fox would have to get licensed and get shareholder approval, and that they won't have a way out of the deal once they exercise it.
I wonder how many gambling licenses Fox would need, one for every state?
I think so, because gambling regulation is left to the states to decide.
I had always taken it for granted that Fox would exercise their option eventually. |
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