Investing.com --Flutter Entertainment (F:PPB) remains Stifel's top pick ahead of third-quarter earnings, as improving U.S. betting trends and a widening valuation discount offer potential upside even as unfavorable sports results and regulatory uncertainty cloud the outlook for online gambling companies.
In an October 25 research note, Stifel warned that earnings could disappoint across the sector as poor sports outcomes weigh on betting operators, prediction-market investment pressures profitability and online casino growth slows.
Flutter Entertainment
Stifel maintained its "buy" rating but cut its price target to $125 from $133. The broker expects a 7% third-quarter adjusted EBITDA miss, partly reflecting unfavorable sports results and Flutter's exit from Brazil in September.
However, FanDuel's U.S. sports betting handle is tracking 10% higher year on year, ahead of the 5% growth expected by analysts. Stifel also estimates promotional spending has declined relative to handle, suggesting market-share gains may be achievable without heavier spending.
Flutter's valuation discount to DraftKings has widened to around 40% on projected 2027 EBITDA, making it Stifel's preferred stock into earnings.
DraftKings
Stifel kept its "buy" rating while lowering its price target to $32 from $36. It expects online sports betting handle growth of 11%, below the 14% consensus forecast, although a 6.6% net gaming revenue hold rate could beat expectations.
The broker expects DraftKings to maintain its roughly $1 billion core EBITDA outlook, but additional prediction-market customer acquisition spending could weigh on reported earnings. Stifel cut its 2026 adjusted EBITDA estimate by 17.4%, reflecting the expected spending pull-forward.
Rush Street Interactive
Stifel maintained "buy" and lowered its target to $30 from $34. It trimmed its third-quarter revenue forecast by 1%, expecting North American revenue growth to slow to 14% from 23% in the second quarter as U.S. online casino growth cools.
However, the broker considers the valuation attractive at less than eight times estimated 2028 adjusted EBITDA, with growth prospects in Latin America and Mexico providing support.
Codere Online
Stifel retained "hold" and its $10 target. Steady momentum in Spain and Mexico, alongside opportunities to gain market share in Mexico, supports the company's growth outlook. However, its valuation premium to peers and uncertainty around Mexican regulation limit the appeal.
Sportradar Group
Stifel kept "buy" but cut its target to $17 from $18, citing adverse European soccer results, Brazil's betting shutdown and the planned sale of its Sports Performance business. Potential growth from prediction-market data deals and improving U.S. betting volumes offers longer-term support, although the broker sees risks if market recovery stalls.
Genius Sports
Stifel maintained "hold" and reduced its target to $7 from $8.50. Prediction-market revenue and Legend synergies could provide upside, but legal uncertainty and a possible U.S. Supreme Court review in 2027 may limit the market's willingness to reward those prospects.
Grandstand
Stifel retained "buy" and its $5.50 target despite continued share-price weakness. The broker sees the valuation as excessively punitive given cash flow from existing revenue-sharing agreements, cost-cutting and expansion into adjacent services, although concerns about solvency remain a market overhang.
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