Peel Hunt17 Jan 2023 11:32
888 is a diamond in the dirt, says Peel Hunt
Gambling group 888 (888) is a ‘diamond in the dirt’ despite the debt the William Hill acquisition brought to the company, says Peel Hunt.
Analyst Ivor Jones reiterated his ‘buy’ recommendation and target price of 210p on the stock, which rose 4.7% to 93.4p on Monday.
The group reported its full-year 2022 trading update and outlook for 2023, which was consistent with previous updates, with ‘modest’ fourth-quarter growth as expected.
Jones said 888 was a ‘diamond in the dirt’ with the share price down 65% over the past year.
‘The William Hill deal has landed the group with too much debt at too high a price,’ he said. ‘We believe the integration will be well-executed and create the potential for the shares to bounce back.’
Regulation is still weighing in the UK, however, with the ‘semi-mythical white paper’ seemingly low on the government agenda, said Jones.
‘We believe that we have anticipated future changes in our forecasts and, ever optimistic, that the eventual publication will trigger a positive reassessment of 888,’ he said.