Flutter Entertainment (LSE:FLTR, NYSE:FLUT) has received an upgrade from Citi to ‘neutral’ following the gambling group’s second-quarter results, which rattled investor confidence.
The US bank argued that a 13% share price fall since April has effectively reset market expectations for the FanDuel and Paddy Power owner.
Citi analyst Ross MacDonald trimmed the bank’s target price on Flutter to $93, down marginally from the previous target of $93.26.
MacDonald cut revenue and profit forecasts across the board, primarily reflecting the downgrade Flutter made to its own American guidance for the year.
The company lowered the midpoint of its US revenue and adjusted EBITDA guidance for the 2026 financial year by 5% and 22% respectively.
Adjusted EBITDA is a measure of profit before interest, tax, depreciation, and amortisation, and is widely used to assess operating performance across the gambling sector.
Citi’s group revenue forecasts now fall 2.1% for the current financial year and 8.7% for 2027, reflecting the broader impact of Flutter’s revised American outlook.
The bank’s adjusted EBITDA estimates drop 0.3% and 8.4% over the same periods, with the steeper 2027 cut weighing on the firm’s longer-term valuation model.
Citi’s 2026 numbers are now broadly in line with Flutter’s revised guidance, with US revenue projected at $7.43 billion and adjusted EBITDA of $763 million.
International revenue is pencilled in at $10.53 billion for 2026, with international adjusted EBITDA forecast at $2.22 billion.
Adjusted earnings per share forecasts fall 2.3% for 2026 and a more significant 12.9% for 2027, adding further pressure to the group’s near-term financial picture.
MacDonald does not expect Flutter to resume share buybacks until the 2028 financial year, citing constraints stemming from the company’s current debt levels.
He then forecasts $1.5 billion of repurchases once the company’s balance sheet position allows it to return capital to shareholders more aggressively.
The cut to Citi’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 adjustment reflects a richer rating at DraftKings, Flutter’s rival American sportsbook operator, and Citi’s view that investors will place more trust in rebased forecasts going forward.
