HSBC Turns Positive on Flutter and Entain After Share Selloff

Flutter Entertainment and Entain shares have received a boost after HSBC recently upgraded both names to Buy, arguing that recent share price weakness has created an attractive entry point for investors.

HSBC moved Flutter to Buy from Hold, setting a $228 price target, down from $265.

Despite trimming its target, the bank said the recent selloff had gone too far and now offers a “buying opportunity.”

The broker acknowledged that the U.S. online gaming market is maturing and seeing slower growth but said the risks in both the U.S. and U.K. “may not be as bad as feared and appear more than reflected in share prices.” 

HSBC added that Flutter could benefit from further U.S. state liberalisation, giving the business fresh avenues for expansion through its FanDuel franchise.

Entain was upgraded on similar logic. HSBC lifted the stock to Buy from Hold with a new price target of 832p, down from 917p. 

The firm again pointed to the sharp pullback in the shares and said the market may be overly pessimistic about regulatory and growth risks in key regions. According to the bank, current valuations already discount these headwinds.

Elsewhere, UBS recently cut its price target on Flutter to $340 from $360 but maintained a Buy rating, saying the upcoming UK Budget remains an overhang. 

UBS suggested much of the potential tax risk is already priced in and argued the shares could re-rate once investors refocus on fundamentals, including FanDuel’s momentum and possible new U.S. legislative openings.

The UK budget announcement is set for today.