Rank Group (RNK) and Evoke Shares (EVOK) Drop Following Downgrades

Shares of both Rank Group (LON:RNK) and Evoke (LON:EVOK) tumbled this morning after Deutsche Bank slashed its ratings and price targets for both UK gaming operators, citing a more cautious outlook for the European gaming sector heading into 2026.

Rank Group shares fell 4.07% to 94.40p, while Evoke shares dropped 4.64% to 28.8p, extending what has been a bruising period for both companies.

Deutsche Bank downgraded Rank Group to Hold from Buy, cutting its price target to 104p from 163p previously. The move represents a 36% reduction in the bank's valuation and leaves minimal upside from current trading levels.

Evoke faced an even more severe reassessment, with its rating lowered to Hold from Buy and its price target slashed from 108p to just 35p, a dramatic 68% cut that reflects mounting concerns about the company's near-term prospects.

The downgrades form part of Deutsche Bank's broader 2026 outlook for European gaming stocks, signalling increased caution across the sector. The bank's analysts appear to be repositioning for a more challenging operating environment, with regulatory pressures, consumer spending concerns, and competitive dynamics all weighing on the industry's growth trajectory.

Operational Headwinds Persist

Rank Group has struggled to generate meaningful shareholder returns over the medium term, with earnings per share declining by 11% annually over the past five years. This deterioration has translated into a 29% loss for shareholders during the same period, underscoring persistent operational headwinds. While the stock enjoyed a 22% bounce over the past month, this recent rally now appears vulnerable following the Deutsche Bank reassessment. The company's current share price of 94.40p sits well below the revised 104p target, offering limited upside potential under the bank's new framework.

Evoke's trajectory has been even more turbulent, with shares down 59.69% over the past year, reflecting deep-seated market scepticism about the company's turnaround efforts. In October 2025, Evoke reported a 5% increase in third-quarter revenue and reaffirmed full-year guidance, suggesting earnings would exceed market expectations. That positive update triggered a 4.4% share price surge at the time, briefly lifting sentiment. However, the optimism proved short-lived as analyst downgrades from both Deutsche Bank and Berenberg Bank followed. Berenberg recently maintained a Hold rating with a 33p price target, closely aligned with Deutsche Bank's 35p view, indicating consensus around limited near-term upside.

Broader Caution from Deutsche Bank

The German bank's cautious stance on gaming mirrors similar moves across other sectors. Deutsche Bank has recently downgraded companies including Pandora A/S, citing rising silver prices, and BAE Systems, pointing to constrained upside potential. This broader pattern suggests the bank is adopting a more defensive posture as it positions for 2026, potentially anticipating economic headwinds or valuation compression across European equities.

For Rank Group and Evoke, the immediate challenge lies in restoring investor confidence amid a sector-wide reassessment. Both companies face distinct operational hurdles, with Rank contending with declining earnings momentum and Evoke working to stabilize a business that has lost nearly 60% of its market value over the past year. The sharp reductions in analyst price targets suggest that markets are pricing in prolonged pressure on margins, revenue growth, or both.

The downgrades arrive at a critical juncture for UK gaming stocks, which must navigate evolving regulatory frameworks, shifts in consumer behaviour, and intensifying competition from online and international operators. With Deutsche Bank now sitting on the sidelines, the onus falls on both companies to demonstrate operational improvements and strategic clarity capable of reversing negative sentiment. Until then, markets appear content to remain cautious, as reflected in this morning's renewed selling pressure.