RBC has reassessed its analysis of William Hill stock in the wake of Coronavirus, promoting the bookmaker’s share status from “sector perform” to “outperform,” based on its liquidity provisions.
The Canadian bank made the prediction in a 9 April note to clients, advising that though the firm posed the “largest upside” among UK firms, it could also prove the “largest risk.”
“We expect a fairly immediate recovery given the low ticket item nature of sports betting,” reported analysts Julian Easthope and Christine Zhou, adding William Hill has “enough liquidity to withstand one year of disruption pre any mitigating measures, and two years of disruption with mitigation.”
Though the bank also lowered its target price for William Hill to 135p from 220p, the two analysts predicted a positive future for the wider gambling market, citing the period as “one of the best buying opportunities in recent times for all of our covered gambling operators.”
“We reiterate our view that the gambling sub-segment is the best positioned within the wider leisure sector,” stated the note.
“We believe this sell-off is an attractive opportunity to buy a basket of the stocks to benefit from the structural growth opportunity in the gambling industry – led by the nascent US opportunity.”