FanDuel parent Flutter Entertainment is Monday's IBD Stock Of The Day, as investors cheer the start of the National Football League's season, which is expected to drive online betting growth. FLUT stock flashed an early buy point in midday stock market action.
FanDuel Is Top Gambling Pick
Last week, the American Gaming Association forecast $35 billion in legal wagering on NFL games this season, up from lasts season's estimated $26.7 billion. The increase partly reflects the maturation of the legal sports betting industry, with legal NFL betting now in its seventh season, the gaming association said. Further, Maine, North Carolina and Vermont have launched legal sports betting since the NFL kicked off last season.
Morgan Stanley started coverage of Flutter's U.S. shares on Aug. 22, following the shift of the company's primary listing from the London Stock Exchange to the NYSE on May 31. Morgan Stanley analysts called the FanDuel parent its top gambling pick, giving FLUT stock an overweight rating and 247 price target. The analysts highlighted its scale advantage, with triple the revenue of its nearest peer, DraftKings and the "steep inflection" of profitability in the U.S. market.
FLUT Q2 Results
On Aug. 13, Flutter blew past Q2 estimates, posting a 56% increase in EPS to $2.61 a share on 20% revenue growth to $3.39 billion.
The betting company reported a 17% increase in average monthly players to 14.3 million.
In the U.S., Flutter maintained its title for the top online sportsbook and iGaming brand. The company claimed a 47% share of sportsbook gross gaming revenue and a 51% share of net gaming revenue.
The company owns various international betting brands including Sky Betting & Gaming, Sportsbet, PaddyPower and Betfair.
The FanDuel parent also hiked its guidance with the report. Flutter now expects U.S. revenue to range from $6.05 billion to $6.35 billion, up from its prior revenue outlook of $5.8 billion to $6.2 billion. Excluding the U.S., Flutter guided international revenue to range from $7.85 billion to $8.15 billion. The company previously expected a range from $7.65 billion to $8.05 billion.
The guidance raise came despite a major tax hike on gross gaming revenue in Illinois during the quarter.
FLUT Stock
FanDuel stock rose 2.9% to around 219.41 Monday afternoon. The move carried FLUT past a 215.19 early buy point, which was the intraday high on Aug. 14, as FanDuel spiked on its prior afternoon's Q2 results.
The recent consolidation starting Aug. 14 looks like a handle on the end of the consolidation dating back to March 13. The official buy point for FanDuel is 226.40, the March 13 peak that preceded the half-year consolidation.
A weekly MarketSurge chart also shows that FanDuel had just etched out a three-weeks-tight pattern as of Friday, with a 216.38 buy point. That tight trade reflected impressive resilience and rising relative strength amid recent market volatility.
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