Already present in our “speculator’s corner” selection, FDJ stock near the end of February (after the publication of the annual accounts and the publication of the takeover bid for Kindred) reached the sales limit we set at 40.15 euros. before falling. Around 36.50 euros, the action of this leader in gambling would again offer interesting entry points to our subscribers who are not yet located. The gaming industry is not very sensitive to the economic situation and FDJ has a dominant position in the lottery (monopoly for 25 years) and in sports betting, a segment that has recently been strengthened by acquiring ZEturf specializes in horse racing betting. At the same time, the group is diversifying into payment services (with the subsidiaries L’Addition and Aleda) and internationally by acquiring the head of the Irish lottery, Premier Lotteries Ireland and with the an ongoing takeover bid for the Swedish Kindred, which owned Unibet in sports games, poker and casino.
Excess reduction and good returns
Last year, organic revenue growth was penalized by the new Amigo game formula and the low number of high-jackpot Euromillions draws, but taking into account purchases, revenue of 2.62 billion was even on increase by 6.5%. Thanks to the good control of the cost structure and the increase of online games, the gross operating margin increased by 0.9 points to 25.1% but benefited from the reversal of non-recurring provisions (without which the rate would have been at 24.3%).
FDJ for his cheap defensive profile
In a more vulnerable market context, the stock of this leader in gambling offers an attractive and cheap defensive image. The key is a stable and secure return of nearly 5%.
Already present in our “speculator’s corner” selection, FDJ stock near the end of February (after the publication of the annual accounts and the publication of the takeover bid for Kindred) reached the sales limit we set at 40.15 euros. before falling. Around 35 euros, the action of this leader in gambling would again offer interesting entry points to our subscribers who are not yet located. The gaming industry is not very sensitive to the economic situation and FDJ has a dominant position in the lottery (monopoly for 25 years) and in sports betting, a segment that has recently been strengthened by acquiring ZEturf specializes in horse racing betting. At the same time, the group is diversifying into payment services (with the subsidiaries L’Addition and Aleda) and internationally by acquiring the head of the Irish lottery, Premier Lotteries Ireland and with the an ongoing takeover bid for the Swedish Kindred, which owned Unibet in sports games, poker and casino.
Excess reduction and good returns
Last year, organic revenue growth was penalized by the new Amigo game formula and the low number of high-jackpot Euromillions draws, but taking into account purchases, revenue of 2.62 billion was even on increase by 6.5%. Thanks to the good control of the cost structure and the increase of online games, the gross operating margin increased by 0.9 points to 25.1% but benefited from the reversal of non-recurring provisions (without which the rate would have been at 24.3%). Despite a scary start to 2024 (turnover up 1.1% like-for-like in the first quarter and +7% with the merger of Zeturf and PLI), the group is confident in aiming for 8% growth in turnover and fully functional. exchange rate of 24.5%. The consensus gathered by Factset expects a net profit of 412 million for this year and 457 million in 2025. Hypothetical with a value of 17.1 and 15.4 times, which is still cheap knowing that net cash the company of 671 million alone representing 9.4% of market capitalization. The other advantage is related to FDJ’s very generous distribution policy as 80% of profits are returned to shareholders in the form of dividends. The highest value of the SHP share was 1.78 Euro. The only drawback in the findings of the investigation by the European competition authority is the amount paid by the group (380 million) to the French State to obtain exclusive rights to run gambling games. The risk would be an upward revision of this balance. We have also just learned that an appeal has been lodged by the Council of State against the decision to allow Zeturf to take over. Finally, regulatory tensions in the Netherlands could make the continued acquisition of the company Kindred, owner of the Unibet online games brand, more difficult. These uncertainties weighed on FDJ’s share price but did not harm the group’s balance sheet.
Our advice: buy Fdj at 35 euros (code: FR0013451333) to aim for a price target of 42 euros
2024-04-22 21:48:06
#FDJ #cheap #defense #profile #Lettre #Bourse
