Sometimes, all it takes to prompt gains in a stock is an analyst’s say-so, and that seems to be what happened with online gambling stock Flutter Entertainment (FLUT). A new boost from Wells Fargo gave Flutter shares a hefty bump in Monday afternoon’s trading. Basically, as noted by Wells Fargo’s Daniel Politzer, it is time to buy the dip, as he upgraded his outlook from Equal Weight to Overweight.
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It was a good time to make such an appraisal, too; back on Friday, shares lost nearly 9% after issues emerged in the United Kingdom that represent a potential loss of profitability in the region. But Politzer suggested pushing on anyway and even raised Flutter’s price target from $224 to $295, noting that “…larger operators have historically been able to withstand costly regulatory changes better than smaller competitors.”
It’s worth noting that, so far, Politzer has enjoyed a 61% success rate on his stock ratings, with an average return of 10.2% per rating.
Panic Across the Pond
The event in question that triggered Friday’s hefty losses was the move by the United Kingdom government to look into a tax hike on the gambling market that would raise about three billion pounds sterling. The new budget will emerge on October 30, and when it does, it may mean significant tax hikes on operations therein.
Naturally, the gambling industry fought back, warning the government against “disproportionate tax regimes,” as it could “…lead to a spike in illegal black-market gaming,” noted RTE. But with the United Kingdom government facing increasing debt loads and needing cash, the gambling market appears to be the piggy bank the Brits are looking for.
Is Flutter Entertainment Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on FLUT stock based on 17 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 38.95% rally in its share price over the past year, the average FLUT price target of $274.54 per share implies 19.35% upside potential.
