Broker tips: Entain, Kitwave
By Iain Gilbert
Date: Tuesday 01 Jul 2025
(Sharecast News) - Berenberg reiterated its 'buy' rating and 1,100.0p target price on bookmaker Entain on Tuesday, stating that recent upgrades to BetMGM guidance boded well.
The German bank said guidance at BetMGM, the joint venture between Entain and MGM Resorts, was "overly conservative" and that its estimates sat ahead of guidance as a result.
On 16 June, BetMGM delivered a positive trading update, upgrading its FY25 guidance following a strong Q2 performance. Berenberg said the upgrade for FY25 was better than it had expected - driving a 5.5% upgrade to its FY25 earnings per share estimate.
"Looking ahead, we remain confident in Entain's ex-US business and in BetMGM, which continues to go from strength to strength," said Berenberg.
Analysts at Canaccord Genuity lowered their target price on Kitwave from 495.0p to 420.0p on Tuesday, noting that the firm's "tough start" to H2 had prompted FY25 forecast revisions.
Canaccord Genuity said Kitwave's H1 results showed "further progress", with revenues advancing both organically and via recent acquisitions, while adjusted underlying earnings rose 22% to £13.2m, in line with internal expectations.
However, a combination of recent softer trading due to weaker consumer confidence and the macro impact of NIC increases on the Group's customers, continued investment into the South West to support the depot transition and the direct impact of NIC increases, which management no longer believes it can offset, unfortunately results in a lowering of FY25 profit expectations.
The Canadian bank updated its FY25 profit forecasts in line with management guidance, with adjusted EBIT reducing by 14% to £38.1m, at the low end of its £38.0m-40.5m guidance range, while outer year reductions were "more modest" at 8% and 6% in FY26 and FY27, respectively.
"Whilst today's news is clearly disappointing, especially in the context of KITW's strong track record of delivery and outperformance post IPO, we believe the medium-term growth opportunities remain undiminished," said Canaccord. "Balance sheet strength remains and recent acquisition integrations are progressing well and provide KITW with the building blocks and national footprint for further profitable growth in what remains a largely fragmented wholesale market."
Reporting by Iain Gilbert at Sharecast.com
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