Flutter Entertainment and DraftKings rally as investors bet on long-term growth potential

Flutter Entertainment plc (NYSE:FLUT) jumped in early trading on Wednesday after the company authorized a share buyback program of up to $5 billion and issued a confident outlook on online sports betting and iGaming growth potential. The updates were part of Flutter’s Investor Day presentation.

The FanDuel owner expects adjusted EBITDA of more than $5 billion in 2027 and for free cash flow of about $2.5 billion. The Ireland-based company said it sees a global regulated addressable market of nearly $370 billion and a North American mature total addressable market of approximately $70 billion, of which the U.S. is forecast to be approximately $63 billion, 1.5X the prior U.S. market estimate. Flutter (FLUT) also sees a sportsbook structural gross gaming revenue margin of 9% to 16% in the long term, reaching 15% in 2027.

Morgan Stanley analyst Ed Young said the firm sees the release as positive, with U.S. guidance in-line to above consensus, a better than expected cost-saving target, and a meaningful buyback authorization.

Flutter Entertainment (FLUT) was up 8.5% in morning trading on Wednesday. DraftKings (NASDAQ:DKNG) rose 3.9% after the positive read on the North America sports betting landscape. DraftKings (DKNG) is forecast to post another quarterly loss in FQ3 before turning profitable again in FQ4.