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Canaccord upgrades William Hill to 'buy' from 'hold'
Canaccord Genuity upgraded William Hill to 'buy' from 'hold' and lifted the price target to 350p from 285p on Friday, pointing to better prospects ahead for its "long-suffering shareholders".
The brokerage said a favourable run of sporting results over Christmas points to scope for a modestly positive surprise in FY17, with a trading update due on January 18th. In addition, it said there have been signs of recuperation in the online business following a period of heavy medicine, with a pick-up in sports wagering and gaming growth in the third quarter. On top of that, Canaccord noted it's a World Cup year, which should drive growth.
The brokerage said that while the triennial review continues to overhang, the Responsible Gambling Strategy Board's views point firmly to a £20 max stake as a worst case scenario.
"And the GVC bid for Ladbrokes Coral demonstrates that bids can be structured to cover the multiple potential Triennial outcomes, leaving WMH as an obvious participant in the next wave of inevitable industry consolidation, in our view."
Finally, Canaccord highlighted the fact that the the US Supreme Court will decide by this summer whether to open the door in the US to a regulated sports betting market. "WMH is well positioned to exploit what would be a material new market opportunity through its existing Nevada sportsbook business."
At 1310 GMT, the shares were up 2.3% to 327.70p.