 JP
Morgan Tips William
Hill to Outperform
Ladbrokes
JP Morgan has taken
a look at the
runners and riders
in the UK bookmaking
field and has tipped
William Hill to do
better than
Ladbrokes.
The broker suggested
investors switch
from Ladbrokes,
which it has
downgraded to
“neutral” from
“overweight”, to
William Hill, which
it has upgraded to
“overweight” from
“underweight”.
JPM said the long
term outlook for the
UK bookmaking
industry is flat,
with limited new
product innovation,
continuing cost
pressures and the
possibility of
gaming machine
regulations all
acting as a brake on
growth.
Following Ladbrokes'
withdrawal from some
higher growth areas
the broker said it
does not expect its
out-performance of
William Hill to
continue.
“We believe
Ladbrokes’ 14% 08
Price/Earnings
premium looks
unjustified and we
expect this
valuation gap to
close,” the broker
said.
JPM has cut its full
year 2008 estimates
by 15% for William
Hill and by 1% for
Ladbrokes. The
broker believes
downside for William
Hill should be
limited by the 7%
dividend yield.
It sees 38% upside
for William Hill and
has set a price
target for 465p,
while it estimates a
25% upside for
Ladbrokes, with a
price target of
345p.
----
Gambling911.com News
Wire
Originally published
March 20, 2008 10:44
am EST
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