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City firm Panmure has downgraded global online gaming group 888 () to 'hold' from 'buy' though it has upped the target price slightly.
It comes despite the firm reporting an increase in net revenue, up 7% to US$97.5mln in its fourth quarter, and ahead of the broker's expectations of US$96.1mln.
Panmure analyst Simon French noted that the firm was trading on 2013 estimates of an 11.9 times enterprise value/ EBITDA, which accurately captured the group's momentum but highlighted:
"This week 888 has launched its real money casino, MAGIC888 on and been recommended for approval as an interactive gaming service provider licence holder in Nevada.
"It has also seen its share price surpass the IPO price and been shortlisted for re-entry into the FTSE 250."
"However, concerns are emerging over the depth and breadth of its software agreements with Caesar's Interactive Entertainment, whilst trade media have reported that talks with Trump Resorts have ended."
The firm became a partner of Caesar's Entertainment in 2011 for legal European online gaming businesses.
The firm is due to issue prelims next Wednesday and consensus forecasts are for US$65.7mln EBITDA.
Panmure increased its target price to 157p from 145p and downgraded its rating to 'hold' from 'buy'.
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