Broker tips: Entain, Quilter

Analysts at Berenberg lowered their target price on bookmaker Entain from 2,060.0p to 1,950.0p on Wednesday, stating there was still value in the shares despite the company's "weaker" second-quarter trading performance.

Berenberg said Entain's second-quarter trading update disappointed the market, leading it to downgrade numbers to reflect lower full-year online net gaming revenue growth expectations.

However, Berenberg, which reiterated its 'buy' rating on the stock, stated it does not think that Entain's share price has "fallen too far" at current levels.

"At the current share price, the market is either materially undervaluing Entain's prospects in the US or in its non-US operations – both of which are unjustified, in our view," said the German bank.

"We value Entain using a divisional DCF model and blend in a value for the US, which gives our price target of 1,950.0p – comprising of 1,060.0p for the ex-US business and 890.0p for the US."

Citi has downgraded wealth management firm Quilter from 'buy' to 'neutral' after cutting its half-year forecasts.

Citing unfavourable markets, the bank cut its guidance for assets under management and revenues by 7% and full-year 2022-2026 earnings per share by 12-19%.

The analysts, who also trimmed their target price on the stock to 105.0p from 170.0p, said: "We continue to like the medium-term self-help story at Quilter – cost saves and flow recovery – but we struggle to see near-term positive catalysts given costs saves are in the numbers, and Quilter lacks positive optionality other European wealth names benefit from.

"We like structural growth in European play, but prefer to play the theme via Swiss private bank Julius Baer Gruppe – more discounted, self-help, more surplus capital – and euro platform FinecoBank."