Broker price targets are not infallible, but they offer a useful starting point when evaluating value across the FTSE 100 index.
According to forecasts from the 18 analysts currently covering Entain, the global sports betting and gaming company’s shares are trading 97% below their consensus 12-month target price.
If those analysts are correct, Entain would represent the single cheapest stock on the entire FTSE 100 by a considerable margin.
The owner of Coral, Ladbrokes, and more than 30 other brands worldwide has seen its share price fall sharply following a major policy shift from the UK government.
In her 2025 Budget, Chancellor Rachel Reeves announced sweeping increases to gambling taxes, sending Entain’s share price down 37% in the months that followed.
Reeves stated: “I will also reform gambling taxes in response to the rise in online gambling. Remote gaming is associated with the highest levels of harm and so I am increasing Remote Gaming Duty from 21% to 40%, with duty on online betting increasing from 15% to 25%. I am making no change to the taxes on in-person gambling or on horse-racing.”
Entain itself has estimated that the tax changes will cost the group approximately £200m per year, a significant blow to profitability.
The group’s price-to-earnings ratio has been in freefall as investors grow increasingly cautious about the regulatory environment surrounding the gambling sector.
Adding to the pressure, there are reported rumours that further tax increases could feature in the Autumn Budget scheduled for 28 October, raising fresh concerns among shareholders.
PM Andy Burnham posted on X in August, grouping betting shops alongside vape shops under the blunt description: “Vape shops. Betting shops. Dodgy businesses.”
That kind of political rhetoric signals the direction of travel for the industry, with more restrictions and higher levies looking increasingly likely rather than a reversal of current policy.
The Gambling Commission’s latest annual survey found that 2.7% of adults scored eight or more on its problem gambling severity index, a figure that is fuelling calls for tighter regulation.
Against that backdrop, Entain did manage to deliver a better-than-expected set of half-year results for the six months to 30 June, reporting EBITDA of £479m, which came in £24m ahead of forecasts.
Large reductions in staff numbers and the boost from the football World Cup helped offset some of the impact of the higher tax burden on the business.
Further job cuts were announced on 16 September, as management continued efforts to reduce costs and bring down the group’s overall debt load.
On the positive side, BetMGM, Entain’s US joint venture with MGM Resorts International, has now reached what the company describes as “sustainable profitability,” providing some geographic diversification away from the troubled UK market.
The falling share price has also pushed Entain’s dividend yield above 4%, though dividends are never guaranteed and depend on sustained earnings performance.
Analysts point to the low valuation multiple, ongoing cost savings, debt reduction efforts, and the better-than-expected half-year numbers as reasons to remain cautiously optimistic about the stock’s longer-term prospects.
However, the broader picture for Entain in the UK remains challenging, with little sign that the political or regulatory environment will ease in the near term.
For investors seeking exposure to the gambling sector, Entain’s low valuation may look tempting on the surface, but the weight of headwinds facing the business suggests the discount exists for very clear and persistent reasons.
