Entain Stock Jumps as Analysts Discuss New Strategic Moves

Entain Plc shares rose this week after analysts discussed new strategies for its US joint venture and broader M&A plans. The betting company based in London and co-owner of BetMGM with MGM Resorts International, became the best-performing stock on the FTSE 100 on Friday after Jefferies issued an optimistic report.

Jefferies Remains Optimistic on Entain With New Price Target 

The brokerage increased Entain’s price target to GBP 12 ($16.20) after setting it at GBP 11.40 ($15.39) and stuck with its “buy” recommendation. Analysts pointed out that consistent earnings and large investments in tech place the company in a good spot to pursue deals that may bring more value. Entain’s shares rose by 2.6% in London, pushing their total gain this year to around 25%. In comparison, the broader FTSE 100 has gone up by 14%.

Jefferies analyst James Wheatcroft stated that Entain’s recent interim results showed its technology is now solid enough to handle different business areas like BetMGM. He mentioned that investors will turn their attention back to mergers and acquisitions, with the US partnership being the main driver. Wheatcroft’s breakdown valuation suggests an increase of about 55% from current levels, even without considering a possible takeover offer for Entain.

BetMGM, a business split between MGM Resorts and Entain, often sparks talk of consolidation. Many in the market believe MGM wants to own the company. Selling its stake could let Entain collect significant money and satisfy activist investors looking to boost returns. Wheatcroft suggested that listing BetMGM on its own in the US or making a deal that uses its tech platform might increase competition around its value, which could help shareholders.

Entain Looks at Options as Analysts Point to Growth Beyond BetMGM

Entain’s investors include well-known activist funds like Eminence Capital and Corvex Management. Keith Meister, who leads Corvex, also serves on MGM’s board. This adds weight to theories about possible changes in how the partnership is managed.

Entain might look into selling off more parts of its business beyond BetMGM. Reports from Australia indicate that the competitor Betr might be interested in buying Entain’s Australian operations. These operations have dealt with leadership changes and regulatory issues. Experts think the sale could bring in about $890 million.

Right now, investors seem confident in the management’s ability to turn stability into stronger growth. Out of the 21 analysts who track Entain, 14 have rated the stock as a “buy” or better. Based on LSEG data, the median price target for the stock is set at GBP 11.11 ($15). With US ventures gaining momentum and activist pressure increasing, experts suggest Entain’s next decision could play a big role in how the market values the company.