GVC Holdings Looks Like A Safe Bet For Sports Betting Stocks

  • Deutsche Bank analysts foresee huge positive growth for GVC Holdings in the back half of 2020.
  • Deutsche’s consensus projection for GVC Holdings set its target price at 1040 GBX, nearly 30% above the current price.
  • One analyst went one step forward and projected 2020 earnings of nearly $900 million, which could push that price even higher.
  • GVC’s price is rebounding after a mid-March crash caused by the coronavirus. The company still has some logistical hurdles to clear, but its outlook is very positive right now.

BERLIN, Germany – A sell-side research firm embedded within Deutsche Bank has forecasted that GVC Holdings, a major British sports betting firm, is due for a huge uptick in profitability in the back half of 2020.

That firm has pegged GVC’s target price at 1040 GBX (£10.40), indicating that it believes GVC has a potential 30% upside from today’s opening price of 814 GBX.

Additionally, one of Deutsche Bank’s analysts, Simon Davies, projects GVC to earn upwards of $880 million in 2020, far ahead of the consensus estimate of $814 million.

This is a huge positive development for GVC, which like most sports betting operators has been suffering from the effects of the coronavirus pandemic.

GVC’s stock price decreased to a paltry 323.70 GBX at the initial cancellation of major sports leagues throughout the world but has since rebounded nicely.

Online gambling stocks have proven to be resilient throughout the pandemic and could be a safe bet for investors of all backgrounds during these trying times.

Key Aspects Of GVC’s Growth

GVC offers both online sports betting and more generalized online casino products.

The ROAR Digital sports betting application, developed in conjunction with MGM Resorts International, is GVC’s primary sports betting product.

ROAR Digital is still finding its footing in the developing sports betting market of the United States, but its prominence in Colorado is encouraging given that Colorado appears poised to become one of the top states for sports betting revenues.

Online casino revenues, which reach a much broader global audience than sports betting, have helped GVC buoy its portfolio despite the downturn in the sports betting market to begin 2020. Online casino gambling has remained popular throughout the pandemic.

The biggest key for GVC to hit Davies’ forecast, however, will be for major sports leagues all over the world to find ways to safely stage games again.

Outside the U.S., major leagues like the German Bundesliga, English Premier League, and La Liga have already resumed play as most countries seem to have put the worst of the coronavirus behind them. These leagues are already drawing a healthy volume of sports wagers.

Unfortunately, in the U.S., things are more chaotic and uncertain.

Just this week, total COVID-19 cases in the U.S. passed 3 million and the average daily number of new cases has skyrocketed past 40,000. Despite this, major professional sports leagues still intend to proceed with their return to play plans.

Four major North American sports leagues—the NBA, NHL, MLB, and MLS—are set to return within the next month, but they have already begun dealing with a rash of infections, the logistical complications of playing in a bubble, and labor disputes over how to distribute decreased revenues.

While Davies’ projection does not explicitly mention GVC’s presence in the U.S. market, if the company wants to exceed consensus projections to the degree that Davies believes it can, North American sports leagues will need to sort out their problems to safely stage games.

News tags: Colorado | Coronavirus | COVID-19 | Deutsche Bank | GVC Holdings | London Stock Exchange | MLB | MLS | MLS is Back | NBA | NHL | Simon Davies | sports betting stocks

Carter Floyd

With a dual background in English and sports performance and business analytics, Carter aims to write stories that both engage and inform the reader. He prides himself on his ability to interweave empirical data and traditional narrative storytelling. When he isn’t keeping readers up to date on the latest sports betting legal news, he’s banging his head against a wall regretting his decision to be a Tampa Bay Buccaneers fan.

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