It would be easy to think that the sputtering economy right now, along with soaring inflation rates on everything from gas to groceries, would mean that gambling was out the door. Not so, says the latest word from Flutter Entertainment (FLUT), parent company of sports betting site FanDuel, who announced plans for share buybacks and an improved outlook in the United States. That sent shares up over 6% in Wednesday afternoon’s trading.
Flutter announced that it would buy back as much as $5 billion worth of its own stock, though it would take a few years to hit that number. The buyback will not happen immediately but rather is expected to start in November after the company’s earnings report emerges. Then, the program will carry on in installments over the course of three or four years.
Flutter announced such plans on the back of new projections about the U.S. gambling market, which is expected to surge. The sports and casino market will hit $63 billion at maturity, noted its latest forecast. Worldwide, that number will be approaching six times that much, hitting $368 billion by 2030. And Flutter looks for its own revenue to increase 14% annually and reach $21 billion in 2027.
A Plan to Take on the World
While the market is planning to surge, Flutter, by its own estimates, will not reap all, or even most, of the benefits. That means Flutter is working to improve itself accordingly and position itself better for success in a changing market. The Flutter Edge, as its internal planning calls it, represents a modified financial model that should help it capitalize going forward. Just recently, it acquired Snaitech S.p.A, an Italian operation that will give it a foothold in the region.
Plus, Flutter’s CEO Peter Jackson will be on hand at the Global Gaming Expo this October 8 in Las Vegas. Jackson will deliver remarks on how it is handling current economic conditions—which certainly do not seem conducive to gambling—and how it plans to address new markets.
Is FLUT Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on FLUT stock based on 14 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 44.32% rally in its share price over the past year, the average FLUT price target of $264.32 per share implies 9.03% upside potential.
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