BUZZ – British Gambling: Jefferies bets big on online migration, product diversity24 Feb 2021 10:04
Jefferies initiates on British gambling operators Gamesys and 888 Holdings with a "buy" rating and PT of 1930p and 380p, respectively
* Shares of GYS up 3.6% at 2388p; 888 up 2.2% at 300p
* Brokerage says both cos will benefit from online migration, product diversification, surplus cash and proprietary software platforms with negative future growth currently priced in
* Jefferies says that 888's diversification by product and geography will drive a higher growth rate and positive re-rating over time
* "Gamesys is a scarce, scaled, differentiated online gambling asset in a consolidating sector" - Jefferies
* Brokerage says proprietary software platforms, strong cash flow and a healthy balance sheet will help bolster acquisitions in both companies
* Data from the UK Gambling Commission showshttps://www.gamblingcommission.gov.uk/news-action-and-statistics/News/data-shows-the-impact-of-covid-19-on-gambling-behaviour-in-december-2020 that during the pandemic consumers have been expanding their portfolio of games and spending more time and money than before
* Avg. stock rating of 888 and GYS is "buy"
* Median PT of 888 is 350p; median PT of GYS is 1525p - Refinitiv Eikon Data
* GYS up 17.5% YTD; 888 up 2.8% YTD with the UK mid-cap index up 2.9%
(Reporting by Siddarth S) ((Siddarth.s@thomsonreuters.com;)