Citi upgrades Flutter after 13% share price slide

Citi has upgraded Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) to 'neutral' following the gambling group's second-quarter results, arguing that a 13% share price fall since April has reset expectations.

The US bank trimmed its target price on the FanDuel and Paddy Power owner to $93, from $93.26. Analyst Ross MacDonald cut revenue and profit forecasts across the board, primarily reflecting the downgrade Flutter made to its own American guidance. The company lowered the midpoint of its US revenue and adjusted EBITDA guidance for the 2026 financial year by 5% and 22% respectively.

Citi's group revenue forecasts fall 2.1% for the current financial year and 8.7% for 2027. Its adjusted EBITDA estimates drop 0.3% and 8.4% over the same periods. The broker's 2026 numbers are now broadly in line with the revised guidance, with US revenue of $7.43 billion and adjusted EBITDA of $763 million. International revenue is pencilled in at $10.53 billion, with adjusted EBITDA of $2.22 billion.

Adjusted earnings per share forecasts fall 2.3% for 2026 and 12.9% for 2027. MacDonald does not expect Flutter to resume share buybacks until the 2028 financial year, citing constraints from the company's debt levels. He then forecasts $1.5 billion of repurchases.

The cut to the bank's 2027 estimates, on which its sum-of-the-parts valuation rests, was partly offset by a higher multiple applied to the US business. That reflects a richer rating at DraftKings, the rival American sportsbook, and Citi's view that investors will place more trust in rebased forecasts.