Playtech (PTEC) has received a new Buy rating, initiated by Jefferies analyst, James Wheatcroft.
James Wheatcroft’s rating is based on several compelling factors that highlight Playtech’s potential for growth and value creation. The company’s strategic focus on its B2B operations provides investors with a unique opportunity to benefit from the increasing online penetration in the global gambling industry. This focus is complemented by management’s strong incentives to double profits and free cash flow, which aligns their interests with those of shareholders.
Additionally, the recent sale of Snaitech to Flutter will enable Playtech to return a significant amount of capital to shareholders through a special dividend, while also strengthening its balance sheet by reducing debt. The company’s diverse portfolio, including stakes in various customer entities, further enhances its valuation. Moreover, Playtech’s medium-term targets suggest a promising outlook for EBITDA and free cash flow growth, supported by positive trends in key B2B segments and regions. These factors collectively underscore the potential for a 25% upside to the new price target, justifying the Buy rating.
Based on the recent corporate insider activity of 15 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PTEC in relation to earlier this year.