Analysts maintain bullish stance on Flutter Entertainment despite recent challenges

(AsiaGameHub) –   Speculation regarding the outlook for Flutter Entertainment has intensified in the weeks following its Q1 2026 financial report, which coincided with the unexpected departure of FanDuel CEO Amy Howe.

The company posted corporate revenues of $4.3bn (£3.5bn), a 17% increase over the $3.66bn recorded in Q1 2025, though FanDuel’s sportsbook revenue remained flat at $1.14bn. Furthermore, the firm’s second-largest market, the UK and Ireland, faces the prospect of significant tax increases, particularly in the UK.

Profitability was another point of concern, as net income fell 38% to $209m (compared to $335m in Q1 2025). This decline was driven by rising operational costs, amortisation related to acquisitions, and restructuring expenses within the US division.

Questions have also surfaced regarding the growing influence of prediction markets. Platforms such as Kalshi and Polymarket are establishing a presence in the US—Flutter’s primary market—and operate under the oversight of the Commodity Futures Trading Commission (CFTC), whereas Flutter is governed by state-level gaming control boards.

While the company has attempted to enter this space with the launch of FanDuel Predicts, some industry observers suggest the move may have come too late to be effective.

Howe’s exit was part of a trio of leadership transitions. Christian Genetski has taken over as CEO of FanDuel, while Dan Taylor, previously the CEO of Flutter International, has moved into the newly established position of President of Flutter Entertainment.

Flutter’s status as a public company is also under scrutiny. The Q1 results were accompanied by the news that the firm is reconsidering its listing on the London Stock Exchange.

Although the business only shifted its primary listing to the New York Stock Exchange in May 2024, it appears it may be preparing to withdraw from London entirely just two years later.

The group’s share price has declined by nearly 50% over the last five years and by more than 61% in the past 12 months, with shares currently valued at approximately $96.

Nevertheless, in comments to SBC News, analysts at Macquarie suggested that stabilization is beginning to occur, even as the global gambling leader deals with slowing US sportsbook growth, regulatory shifts, and the rise of prediction markets.

In a research update released earlier this month, Macquarie maintained its “Outperform” rating for Flutter but revised its price target from $200 down to $190.

“Flutter has built a diverse portfolio of top-tier brands and technology through a proven and repeatable M&A strategy, making it, in our view, a premier way to capitalize on global trends in online gambling and legalization,” the report stated.

The investment bank pointed to dampened sector sentiment and increasing uncertainty surrounding prediction markets and software risks as the primary reasons for the adjusted valuation.

Despite the lower target, analysts Chad Benyon, Aaron Lee, and Sam Ghafir noted that Flutter’s current valuation is becoming more attractive, with shares trading at roughly 7x projected 2027 EBITDA and 8x forward earnings.

Macquarie characterized the Q1 2026 results as a positive step, with both revenue and EBITDA ($631m) slightly exceeding market expectations.

The analysts highlighted that a 19% year-over-year growth in iGaming helped mitigate the slower momentum in US online sports betting.

International performance was driven by strong results in Italy, along with promising early trends in the Brazilian market.

Flutter also stood by its full-year 2026 projections, targeting roughly $18.3bn in revenue and $2.9bn in EBITDA.

Flutter banking on major sports events

However, Macquarie noted that the recovery is expected to be concentrated in the second half of the year, as Q2 EBITDA guidance came in approximately 15% below consensus estimates.

The report indicates that Flutter is relying on several strategies to stimulate growth, including expanded loyalty initiatives, product enhancements, improved sportsbook mechanics, and broader operational efficiencies.

Major sporting events, such as the 2026 FIFA World Cup and the upcoming NFL season, are also expected to serve as significant catalysts for success later in the year.

Macquarie argued that Flutter’s scale and diversified brand assets continue to offer a major competitive edge over other gambling and prediction market platforms.

The group owns a variety of prominent betting and gaming brands, including FanDuel, PokerStars, Paddy Power, Betfair, and Sky Betting and Gaming, while holding leading positions in multiple regulated jurisdictions.

Through FanDuel, the company also manages approximately 39% of the US gambling market, which has seen rapid expansion in recent years.

Management appears to share the analysts’ positive outlook. In addition to an active $250m share buyback program—part of a larger $5bn initiative—directors have recently been purchasing shares.

Last week, Carolan Lennon and Sean Wickham, identified as an “Independent Non-Executive Officer” and a “Person Closely Associated,” respectively, bought more than £35,000 worth of Flutter stock.

Just days prior, on May 12, CEO Peter Jackson increased his stake in the firm, while Chair John Bryant and Non-Executive Officer Stefan Bomhard also acquired more shares.

The Macquarie report also emphasized Flutter’s potential for strong long-term cash flow. While the company is expected to maintain over $10bn in net debt through 2026, Macquarie predicts free cash flow will improve significantly, rising from $407m in FY 2025 to an estimated $1.26bn in 2026 and nearly $2.75bn by 2028.

Key risks noted by analysts include stricter gambling oversight, tax increases, slower legalization in North America, and rising competition from prediction markets.

However, Macquarie and company insiders remain optimistic about the world’s largest online gambling PLC, despite these challenges and the recent downturn in its stock price.