Barclays Cuts Entain’s Price Target, Downgrades Company to Equalweight

Late last year, Entain faced pressure from activist investors, urging for change in light of a tipping share price trend observed over the year. The announcement came on the heels of the unexpected departure of the company’s CEO, Jette Nygaard-Andersen.

Now, Barclays reduced its price target for Entain from 1,120p to 1,070p, downgrading the company from “overweight” to “equalweight.” Additionally, the financial institution pointed out that the company’s “recovery is not straightforward.” Barclays explained in addition: “For the stock to work we think it needs Online to return to market growth rates or better and US share to stabilize (and grow),” pointing out that “neither are a given.”

According to Barclays, Entain has limited free cash flow, adding that high leverage results in restriction for merger and acquisition options. The company added: “The stock appears cheap but risk-reward is fairly balanced here so we downgrade to EW.”

Still, Barclays acknowledged the importance of a new CEO for the company. It said that the appointment of a new executive may “address the balance sheet,” resolving different issues and concerns.

Changes to Entain’s C-Suite Continue

Earlier this month, media reports suggested that Entain continues with its management reshuffle. Reportedly, the company’s operations director, Peter Marcus, may leave the company after a tenure that lasted for eight years. The operations director is reportedly going to leave his role at the end of June this year.

Last month, Entain confirmed its withdrawal from more than 140 unregulated gambling markets across the globe. At the time, the company disclosed details regarding the latest exit that involved territories such as Antarctica and Vatican City. Further territories Entain withdrew from included jurisdictions with a population of less than 1,000 people like the Pitcairn Islands, United States Minor Outlying Islands, as well as the French Southern and Antarctic Lands, among others.