Entain shares soar on upbeat outlook, FY guidance hike

Investing.com -- Shares in Entain plc (LON:ENT) jumped on Thursday after the company raised its full-year earnings forecast, signaling improved operational performance and a strong outlook.

At 4:15 am (0815 GMT), Entain plc was trading 7.2% higher at £561.20.

The global sports betting and gaming group reported a solid H1 performance, with Total Group Net Gaming Revenue (NGR) increasing by 6% year-on-year. Notably, online NGR, excluding the US, grew by 9%. 

Entain has raised its FY24 guidance, reflecting stronger-than-anticipated Q2 performance and adjusted regulatory timelines. 

The company now projects low single-digit positive growth in Online NGR on a proforma basis, an improvement from the previously expected low single-digit decline. Group EBITDA for the full year is forecasted to range between £1,040 million and £1,090 million.

“The company has upgraded its online division revenue guidance and provided fresh group EBITDA guidance, both of which are small ahead of consensus,” said analysts from UBS Global Research in a note. 

This positive outlook reflects the company's improving operational execution, as evidenced by the expansion of profit margins and the identification of additional cost-saving opportunities through the Project Romer efficiency program.

The target for net savings under this program has been increased to £100m for 2026, from the previous estimate of £70m.

Entain's US operations, particularly BetMGM, also contributed to the positive sentiment. While the business continues to invest heavily, it has demonstrated accelerating net revenue momentum and a stabilization of market share.

“Entain is now guiding to a return to positive organic growth in its online division, as well as a stabilisation in earnings expectations, both of which the equity story greatly needed, in our view,” UBS added. 

Separately, Gavin Isaacs has been appointed as the new CEO, effective September 2. Isaacs brings extensive experience in the global sports betting, gaming, and lottery industries.