{"id":300693,"date":"2023-11-28T10:11:23","date_gmt":"2023-11-28T16:11:23","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=300693"},"modified":"2023-11-29T21:51:33","modified_gmt":"2023-11-30T03:51:33","slug":"entain-hit-with-double-downgrade-by-goldman-sachs","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/","title":{"rendered":"Entain Suffers Double Downgrade by Goldman as Activists Circle"},"content":{"rendered":"

Entain (OTC: GMVHF) endured a double downgrade by Goldman Sachs with the bank lowering its rating on the gaming stock to \u201csell\u201d from \u201cbuy” late Monday evening.<\/p>\n

\"An
An Entain lounge for employees. Goldman Sachs double-downgraded the stock to “sell.” (Image: Entain)<\/figcaption><\/figure>\n

In skipping over \u201chold,\u201d Goldman slashed its price target on the Ladbrokes owner by 43.4% while admitting it\u2019s been wrong on the struggling stock. The bank also mentioned softness in Entain\u2019s online business, which the operator cited in September as the culprit behind a slack 2023<\/a> net gaming revenue (NGR) forecast, as one of the reasons for the downgrade.<\/p>\n

We now expect Entain\u2019s pro-forma Online growth to be negative in 4Q23 and 1H24, only returning to positive growth in 2H24,\u201d<\/strong>\u00a0Goldman analyst Ben Andrews wrote.<\/p><\/blockquote>\n

Goldman added that increasing competition, good fortune by bettors in the third quarter, and regulatory issues are among the woes prompting bearish revisions to Entain\u2019s earnings per share (EPS) estimates. The operator recently agreed to pay $729 million<\/a> to the UK\u2019s HM Revenue & Customs (HMRC) office to settle allegations of bribery stemming from previously held operations in Turkey. The company departed that country in 2017.<\/p>\n

Andrews pared his 2024 and 2025 EPS forecasts on Entain by approximately 30%.<\/p>\n

BetMGM Thorn in Entain\u2019s Side<\/h2>\n

BetMGM, of which Entain owns 50%, is also becoming a drag on the operator\u2019s results. The 50\/50 joint venture between Entain and MGM Resorts International (NYSE: MGM) is losing market share to DraftKings (NASDAQ: DKNG) and FanDuel, the top two operators in the US online sports betting industry.<\/p>\n

\n

Making matters worse is the fact that while DraftKings and FanDuel are firming their duopoly, competition for the remaining market share is intensifying with Bet365 expanding its US footprint and with the recent entries of ESPN Bet and Fanatics into the market.<\/p>\n<\/div>\n

Previously, Goldman expected BetMGM to turn significantly profitable in 2024 with a potential return of capital to Entain and MGM. Now, Andrews expects Entain and MGM to reinvest any 2024 profits generated by BetMGM back into the business.<\/p>\n

Those could be among the reasons why some analysts are pushing Entain<\/a> to consider evaluating some form of compromise regarding BetMGM, including possibly simply divesting its stake in the unit to MGM. At the Global Gaming Expo (G2E) in Las Vegas last month, Entain CEO Jette Nygaard-Andersen told attendees that joint ventures don\u2019t last forever<\/a>, but it remains to be seen if the gaming company is looking to depart BetMGM over the near term.<\/p>\n

Downgrade Could Be Fuel for Entain Activists<\/h2>\n

Goldman\u2019s double downgrade of Entain shares arrived just days after<\/a> it was revealed that Dendur Capital and Sached Heam Capital, two New York-based hedge funds, took large stakes in the stock.<\/p>\n

Those money managers are making clear they are activists and they are pushing the Entain board to give a seat to Eminence Capital founder Ricky Sandler. Dendur Capital and Sached Heam also want the board to allow Sandler to have a role in filling other director vacancies.<\/strong><\/p>\n

Goldman\u2019s Thomas also mentioned Entain\u2019s weakening free cash flow position, which could further embolden the activist investors to push for a sale of the company, something Thomas acknowledges as the primary \u201cupside risk\u201d for the stock.<\/p>\n","protected":false},"excerpt":{"rendered":"

Entain (OTC: GMVHF) endured a double downgrade by Goldman Sachs with the bank lowering its rating on the gaming stock to \u201csell\u201d from \u201cbuy” late Monday evening. In skipping over \u201chold,\u201d Goldman slashed its price target on the Ladbrokes owner by 43.4% while admitting it\u2019s been wrong on the struggling stock. The bank also mentioned […]<\/p>\n","protected":false},"author":46,"featured_media":275405,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,81883,1074],"tags":[81903,82205,80968],"acf":[],"yoast_head":"\nEntain Hit With Double Downgrade By Goldman Sachs<\/title>\n<meta name=\"description\" content=\"Entain hit with double downgrade to sell rating by Goldman Sachs.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Entain Hit With Double Downgrade By Goldman Sachs\" \/>\n<meta property=\"og:description\" content=\"Entain hit with double downgrade to sell rating by Goldman Sachs.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2023-11-28T16:11:23+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-11-30T03:51:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/An-Entain-lounge-for-employees.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"676\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/\",\"url\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/\",\"name\":\"Entain Hit With Double Downgrade By Goldman Sachs\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/An-Entain-lounge-for-employees.jpeg\",\"datePublished\":\"2023-11-28T16:11:23+00:00\",\"dateModified\":\"2023-11-30T03:51:33+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Entain hit with double downgrade to sell rating by Goldman Sachs.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/entain-hit-with-double-downgrade-by-goldman-sachs\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/An-Entain-lounge-for-employees.jpeg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/05\/An-Entain-lounge-for-employees.jpeg\",\"width\":1200,\"height\":676,\"caption\":\"An Entain lounge for employees. 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