Gibraltar-based online gambling group 888 Holdings was the only gambling industry representative to feature in a list of 41 stocks which the UK investment banking company Peel Hunt outlined for top growth in 2021.
Growth Potential List
Urged by the tumultuous financial 2020 due to the economy-wide knock-on effects of the coronavirus spread and the enforced measures to contain it, Peel Hunt analyzed 13 sectors with an average market capitalization of £870 million and prepared a list of 41 companies that represent a significant potential for growth during this year.
The market cap of businesses which made its way to the top growth potential list range from £228 million for the restaurant operator Loungers, to £17.4 billion for the online grocery service Ocado, and 888 Holdings is the only company from the gambling industry to have made the list.
According to Peel Hunt analyst Ivor Jones, stocks of the gambling group offer a huge growth potential due to maturing technology investments, healthy balance sheet and access to the high growth potential of the US market.
“All the ingredients are in place. 888 has been delivering strong, geographically broad, organic revenue growth. It has material upside potential from upgrades to its in-house technology platform and from finding a killer deal in the US.”
Ivor Jones, Analyst, Peel Hunt
William Hill Acquisition an Opportunity
Peel Hunt also sees hidden potential related to the acquisition of William Hill by the US casino giant Caesars Entertainment. The £2.9 billion deal agreed by both parties would allow 888 Holdings to offer a higher price than the one it offered in 2016 and acquire William Hill’s online business in Europe.
“It is well-placed to continue to deliver positive upside surprise on growth.”
Ivor Jones, Analyst, Peel Hunt
Caesars had previously stated it had no interest in keeping the European assets of William Hill, but also showed resolve to offer the business for sale only to industry operators which are willing to keep and further develop it.
By the end of December, Caesars which already owns 20% of the UK-based sports betting operator cleared the antitrust review related to the pending acquisition as the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) terminated earlier.