Date: Monday 18 Jun 2012
Investec has reiterated its 'buy' recommendation for bookmaker William Hill, highlighting the group's position as the market leader in online sports betting.
The broker says that the key drivers of market share gains in both sports and gaining have been: "product investment and enhancements; trading team expertise; exemplary marketing and customer retention; and relationships with stand-out product providers."
"Following a trip to its online operations in Gibraltar, we have greater confidence in the group's future long-term free cash flow and quality of returns," said analyst James Hollins.
He said that the visit supported the broker's view that William Hill has been "successful in driving a UK market leading position in online fixed odds sports betting, as well as considerable strength in gaming."
Based on revised discounted cash flow inputs relating to long-term group returns and risk weighting, Investec has raised its target price from 285p to 330p. Despite consumer headwinds and UK online taxation from 2015 onwards, the broker maintains its positive view on the stock.
By 12:33 on Monday, shares were up 0.45% at 268.4p.
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