By George Glover
Some of the National Football League's strongest teams are having dominant seasons -- and that's helping sports bettors beat the house.
FanDuel owner Flutter Entertainment cut its fourth-quarter U.S. guidance late Tuesday, blaming gamblers who won big by backing favorites. The current NFL season "has been the most customer-friendly since the launch of online sports betting," the company said in a trading update, adding that favorites have had their highest win rate in nearly two decades.
Flutter is now expecting $1.59 billion in revenue over the quarter ended Dec. 31, way below the $1.97 billion figure analysts polled by FactSet were expecting. Its U.S. stock fell 2% to $246.71 ahead of Wednesday's opening bell, and its London-listed shares were down 2.9% in morning trading.
MoffettNathanson analyst Robert Fishman rates Flutter as a Buy with a $320 price target that implies shares could climb 27% from their price as of Tuesday's close. He said in a research note published Tuesday that while there is "inherently some risk in the sports betting business from adverse sport outcomes," the dip in revenue could end up being a one-off.
Shares in DraftKings were down 2.1% in premarket trading, although Fishman thinks it's better positioned than its rival. A big chunk of Flutter's lost revenue came from parlays -- when customers place a single bet on multiple teams winning their respective fixtures -- and those sorts of wagers "constitute a smaller share of the bet mix" at DraftKings, he said.
Flutter did give its shareholders some good news Tuesday: sports bettors across the Atlantic aren't doing so well.
Flutter estimated that full-year revenue for the brands it owns outside the U.S. will be 1% to 2% higher. It pointed to favorable soccer results in the English Premier League -- where underdogs such as Nottingham Forest and Bournemouth are having stellar seasons, while traditional powerhouses including Manchester United and Tottenham Hotspur flounder.
Write to George Glover at george.glover@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 08, 2025 09:12 ET (14:12 GMT)
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