Ben Andrews, an analyst from Goldman Sachs, has initiated a new Sell rating on La Francaise des Jeux SA (FDJ).
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Ben Andrews has given his Sell rating due to a combination of factors impacting La Francaise des Jeux SA. The company’s recent acquisition of Kindred has expanded its operations into international betting and gaming markets, altering its traditional business model from a monopoly lottery operator in France to a broader competitor in Europe. While this strategic move is seen as a potential growth opportunity, it also introduces increased regulatory and competitive risks that could impact the company’s financial performance.
Additionally, there are concerns about potential tax increases in France and heightened player protection regulations internationally, which could negatively affect earnings and dividend forecasts. The current stock valuation does not appear to adequately account for these risks, especially considering the premium at which FDJ shares trade compared to its peers, despite having slower growth prospects. Consequently, Andrews suggests that there are more attractive investment opportunities available in the gaming sector.