FDJ: obtains first 'neutral' rating from Citi
(CercleFinance.com) - Citi initiates coverage of the Francaise des Jeux (FDJ) share, the main loto operator in France, floated on the stock market end-November at a reference price of 19.
9 euros per share.
The analyst has given the group a "neutral" rating, with a target price of 25 euros.
Citi noted the 20% gain on the share price since the IPO, giving it an EV/EBITDA multiple of 11.2x 2020 earnings, versus the sector average of 10.5x.
Analysts see FDJ as a national champion in France, with average annual growth of 5.5% over the past 20 years and strong cash flow generation.
This can be explained by the monopoly status of the national lottery as well as strong growth in sport betting, which should continue to enjoy improving profitability in 2020.
But, the group could carry out acquisitions and/or return cash to shareholders although the latter option does not appear very likely in the short term, Citi believes.
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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
9 euros per share.
The analyst has given the group a "neutral" rating, with a target price of 25 euros.
Citi noted the 20% gain on the share price since the IPO, giving it an EV/EBITDA multiple of 11.2x 2020 earnings, versus the sector average of 10.5x.
Analysts see FDJ as a national champion in France, with average annual growth of 5.5% over the past 20 years and strong cash flow generation.
This can be explained by the monopoly status of the national lottery as well as strong growth in sport betting, which should continue to enjoy improving profitability in 2020.
But, the group could carry out acquisitions and/or return cash to shareholders although the latter option does not appear very likely in the short term, Citi believes.
Copyright (c) 2020 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.