Edison Initiates Coverage of 32Red (TTR)

LONDON, September 21, 2016 /PRNewswire/ --

32Red's brand punches above its weight in the UK online casino market. Management has adopted a more aggressive stance since mid-2015, both in terms of marketing and with the highly accretive £8.4m Roxy Palace acquisition. Interims show H116 EBITDA rising to £4.5m (H115: £1.2m) and we initiate with forecast EPS more than doubling in 2016 and growing by over 65% between 2016 and 2018. Yet the 2016e P/E is only 13.5x and our peer group comparison and DCF suggest a value of 193-247p per share, 46-86% above the current share price.

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32Red's 2017e EV/EBITDA is only 6.0x and we believe that investors have not yet recognised the shift in scale and growth momentum that is taking place. Our peer group comparison suggests a share price of 188-198p (average 193p), although the strength of the brand, strong regulated bias and management's track record could justify a greater premium. Our DCF gives 247p.

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All reports published by Edison are available to download free of charge from its website http://www.edisoninvestmentresearch.com.

About Edison: Edison is an international equity research firm with a team of over 110 analysts, investment and roadshow professionals and works with both large and smaller capitalised companies, blue chip institutional investors, wealth managers, private equity and corporate finance houses to support their capital markets activity. Edison provides services to more than 420 retained corporate and investor clients from offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact: 

Jane Anscombe, Edison Investment Research, +44(0)20-3077-5740 Katherine Thompson, Edison Investment Research, +44(0)20-3077-5730 [email protected]

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SOURCE Edison Investment Research

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