Flutter beats earnings estimates on post-lockdown sports betting boom

Flutter expects to beat its earnings forecast by around £100m this year due to a boost from post-lockdown sports betting.

The owner of Sky Bet and Paddy Power said adjusted earnings for its brands outside of the US would be in the region of £1.28bn to £1.35bn in 2020, rather than the £1.18bn to £1.33bn it had previously suggested.

CEO Peter Jackson said performance in the third quarter had “exceeded expectations” and that reaching the $1bn mark for gross revenues in the US marked “a major ‘first’ for an online operator”.

Fundamentals

Flutter has a strong track record of delivering strong sales growth (+50.61% 2019).

Like many growth stocks, Flutter trades on a high forward PE ratio of 29 times earnings – this means that failure to meet the markets lofty expectations will likely be punished by investors.

Technicals

Flutter have a powerful long-term uptrend and the shares have been one of the FTSE’s top performers this year.

Recent price action has seen the shares stall at highs and enter a ‘consolidation phase’.

However, it should be noted that the shares are continuing to carve out higher swing lows during this consolidation phase and that is undoubtedly a bullish sign.

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