Berenberg slashes targets for gaming firms post-Budget, downgrades Evoke

Berenberg has slashed its target prices across the UK gambling and betting sector as a result of downgrades to estimates driven by this week's Autumn Budget.
The broker lower its target price for Flutter Entertainment from 24,200p to 18,100p, for Entain from 1,400p to 1,200p, and for Evoke from 95p to just 33p. While Flutter and Entain were still rated 'buy', Evoke's recommendation was cut to 'hold'.

On Wednesday, chancellor Rachel Reeves announced a raft of tax-raising measures, including an increase in the remote gaming duty from 21% to 40% as of April 2026, and an increase in the remote betting duty (excluding horse racing) from April 2027.

All three companies lambasted the move, announcing that the increased duties will hit bottom lines by nine-figure amounts over the coming years. William Hill owner Evoke, in particular, claimed the hikes will result in "thousands of industry-wide job losses and increase customer activity on the unregulated black-market", ultimately reducing the overall amount of tax paid by the gambling industry.

According to Berenberg, the changes will drive "meaningful downgrades" for Evoke, given the importance of the UK market to the business, as well as increase the company's leverage.

"Evoke finds itself in a difficult position. [...] This elevated leverage leaves little room for error and, against a difficult backdrop, Evoke will need to execute flawlessly to navigate a tricky environment. With that in mind, we see little scope for the multiple to rerate and, with an uncertain earnings outlook, we cut our recommendation to 'hold'," the broker said.

In contrast, Berenberg believes the news will remove the overhang weighing on Entain's shares, despite estimates having to be cut, given the stock has traded lower in the run-up to the Budget. The broker expressed bullishness for Entain's business outlook outside the UK, and said it remains a "top pick" in the sector.

As for Flutter, the company is still poised to deliver "meaningful growth over the coming years and sustained shareholder returns", the broker said.