Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) has had its price target reduced to $180 from $210 by Jefferies, citing a significant increase in US promotional spending.
The Wall Street firm slashed its Group EBITDA estimates by 8% for 2027 and 13% for 2028, with reductions entirely driven by lower US projections.
Jefferies left its International estimates unchanged, noting Flutter’s second quarter results came in broadly ahead of expectations across key metrics.
The firm recorded a 3% Group EBITDA beat in the second quarter, with US EBITDA coming in 11% above forecast and International EBITDA 3% ahead.
A new $270 million investment in US online sportsbook promotions for the second half of 2026 was identified as the primary factor weighing on Jefferies’ revised estimates.
The investment is designed to accelerate FanDuel’s sportsbook momentum, following stronger-than-expected customer reactivation around the NBA Finals and World Cup, with record online sportsbook active users in June and July.
Jefferies expects US promotional spending to rise to approximately 6% of revenue in the second half of 2026, compared with the 4% to 5% range seen in recent periods.
The firm described the strategy as a “bump-and-run” approach aimed at re-engaging lapsed customers, and does not anticipate elevated promotions continuing indefinitely.
Jefferies also highlighted $90 million in annualized US cost savings and a new $150 million annualized US market-making opportunity, alongside $500 million in Group cost savings extended through fiscal 2029.
The firm noted that absent the additional promotional investment, these factors combined with the second-quarter performance would have supported a 6% increase to its 2026 US EBITDA estimate and a 2% increase to its Group estimate.
For 2027, Jefferies’ $1.2 billion US EBITDA estimate incorporates annualized cost savings, market-making benefits, a $50 million benefit from the NFL calendar reversal, $290 million of elevated promotional spending, and a $100 million reduction related to delayed FanDuel Predicts investment.
Jefferies cautioned that the impact of Flutter’s promotional strategy may take several weeks to become visible in the data, leaving relatively few near-term catalysts for the stock.
The firm noted Flutter’s International operations continue to show momentum, and that the stock trades at roughly 7 times enterprise value to EBITDA, a multiple it views as failing to reflect successful US execution.
Shares of Flutter traded at $94 on Monday afternoon, reflecting ongoing investor uncertainty around the longer-term implications of the elevated promotional spending program.
