Paddy Power Betfair confirms new top management appointment
News on 8 Jan 2018
News on 8 Jan 2018
Online and retail gambling group Paddy Power Betfair confirmed in a stock exchange advisory Monday that as advised in notifications last year (see previous reports) Peter Jackson has taken up the position of chief executive officer, replacing Breon Corcoran, who stepped down from the Board on 7 January 2018.
In related news, investment specialists Morgan Stanley commented in a note that the gambling market is expecting a “significant acceleration” in online growth, but downgraded Paddy Power Betfair to “underweight” with a GBP 75 per share price target (the current price is around GBP 87.10).
The downgrade was surprising, given Morgan Stanley’s own admission that the betting group is “a high quality company with strong technology and a robust balance sheet,” and other analysts’ predictions that anticipate “significant acceleration” in the group’s online revenue growth following the integration of the two formerly separate gambling businesses.
Morgan Stanley opined that this acceleration may not materialise, observing:
“We see few silver linings from regulatory changes in Australia (and the 15 percent EPS hit not fully in consensus), and the company needs to address some major strategic issues (which may also limit balance sheet redeployment).
“These could all put pressure on the stock’s premium valuation, and we see better returns elsewhere.”
Ladbrokes Coral plc, which is also navigating a post-merger integration, is seemingly not deemed to be in favour with Morgan Stanley either, and has also been downgraded. The investment house moved its rating to ‘equal weight’ from ‘overweight’, with the price target adjusted to 198p from 200p.
