Flutter catches a flurry of updates as investors pile in

Since listing on the New York Stock Exchange at the end of January, the shares of Flutter Entertainment plc NYSE: FLOOD they have gone from strength to strength. They have gained more than 40% since the January low and are approaching the all-time high they previously reached in 2021.

Previously listed in London, the sports betting company owns brands such as Paddy Power, FanDuel and Betfair and is clearly doing something right. It has seen consistently higher revenues over the past two years while simultaneously building a track record of profitability. With its shares starting to show considerable momentum, it has earned its place on any investor’s watch list.

New bullish updates

JPMorgan improved its rating just last week. The team raised Flutter shares to full “overweight” from “neutral,” noting that its positive outlook on the company’s opportunities in the U.S. was enough to justify raising revenue and earnings estimates.

This optimism stems from an anticipated expansion of the total addressable market due to the ongoing U.S. legalization of sports betting, with expected market share gains, particularly in iGaming. Flutter’s market leadership and strong moat position should allow it to capture a significant share of an untapped market. JPMorgan specifically singled out Flutter’s FanDuel brand, which accounts for 40% of the group’s revenue, as a key component of its bull thesis.

The Office of Lottery and Gaming announced earlier this week that FanDuel will become the sole operator of the entire mobile sports betting scene in Washington, DC. The city will derive millions in tax revenue from gambling as FanDuel and Flutter build their brands as go-to operators for more cities and jurisdictions nationwide.

Improved fundamental outlook

The bullish upgrade echoed that of the Barclays team, which also raised its rating on Flutter shares to “overweight” in late February, citing “multi-year earnings growth potential.” Despite the recent gains, they still felt the stock had an attractive valuation, especially when taking into account the growth potential of the US market.

Like JPMorgan’s position, they see the ongoing legalization of sports betting as a major tailwind that should be present in the near future, with Flutter’s next earnings likely to be better than analysts’ forecasts.

Investors considering a position should take confidence from the strong fundamental outlook and the stock’s increasingly solid and technical position. Flutter shares are less than 10% away from reaching the previous all-time high and, based on recent performance, appear increasingly likely to test it at least in the coming weeks.

Strengthening the technical position

There’s nothing like a new all-time high to push a stock even higher, and with many stocks having already reached that milestone in recent weeks, Flutter is benefiting from strong risk appetite in the market. Look for the company’s stock to continue setting higher highs and lower lows, a uniquely bullish technical pattern, as it heads towards $230.

The JPMorgan team gave Flutter a new price target of $272 this week, indicating a targeted upside of at least 20% from the stock’s close on Thursday. If Flutter shares reach this level in the next few weeks, they would crush the 2021 high around $240 and place themselves firmly in light blue territory.

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