Canaccord ups price target on 888

Canaccord Genuity has upped its price target on 888 Holdings after the gaming group reported a strong set of first quarter numbers.

The bank, which retains its ‘buy’ recommendation on the FTSE 250 firm, increased the target price to 475.0p from 420.0p. It also upped its full-year forecasts.

Canaccord said: "888 has entered the 2021 full year with positive momentum and a strong suite of new products for its growing global user base. [The] first-quarter update confirms an impressive start to 2021.

"We upgrade our forecasts by around 5%-6%, and continue to believe the outlook for 888 is exciting. With broad geographic exposure, a strong debt-free balance sheet, no legacy retail exposure and proprietary technology platforms across all major product verticals, 888 looks well placed for further growth."

The bank has increased its forecast for full-year adjusted earnings before interest, tax, depreciation and amortisation by 5%, to $155.0m

It continued: "The growing cash balance offers financial firepower to expand faster via M&A, as well as increase shareholder distributions.

"We also remain of the view that 888 could be an attractive partner to larger players looking to expand their online exposure, given its highly regarded proprietary tech platform and global presence."

Canaccord concluded: "Despite the shares rising 51% in the year to date, we continue to believe that the valuation remains compelling."

As at 1415 GMT, shares in 888 were ahead 5% at 450.8p.

Earlier on Wednesday, 888 reported a better-than-expected 56% jump in first-quarter revenues, driven primarily by its casino and sports betting markets.