Flutter ’26 Prediction Market Vulnerabilities Limited According to Analyst

• Flutter’s Q4 earnings update likely to include prediction markets commentary
• ‘No material adverse’ effects expected, says analyst
• Stage is set to refocus on fundamentals, compelling multiples

Flutter Entertainment (NYSE: FLUT) delivers fourth-quarter results later this month and with the stock down 29.07% year-to-date, that update could be the ideal opportunity for the gaming company to allay investor fears about prediction markets.

One analyst believes that’s what will happen. In a new report to clients, James Wheatcroft of Jefferies said that if the Paddy Power owner highlights minimal headwinds created by prediction markets and ongoing confidence in the medium- to long-term opportunity set in the US, the investment community may be compelled to reassess the gaming company’s strong fundamental outlook.

FLUT’s addressing of these two debates should pave the way for a refocus on attractive fundamentals and valuation: a 20% earnings before interest, taxes, depreciation, and amortization (EBITDA) compound annual growth rate (CAGR) for 8x enterprise value/EBITDA (10% free cash flow yield),” observes the Jefferies analyst.

Flutter has direct prediction markets exposure in the US via the recently launched FanDuel Predicts, which is a standalone platform separate from the standard FanDuel sports betting mobile application.

Flutter Likely Say Prediction Market Impact Is ‘Negligible’

There’s no denying that prediction market volume is rising, largely led by sports event contracts, and that those platforms are competitors sportsbook operators must take seriously, but the extent to which Kalshi and others are stealing business from the likes of Flutter remains to be seen.

“We continue to see no signs of cannibalization and see several nonstructural factors as more likely drivers of handle softness (unfavourable sports calendar, sharp reduction in promotional spend, recycling headwinds), a message echoed by BetMGM last week,” adds the analyst.

He also points out that when it reports earnings, the FanDuel owner is likely to articulate pathways to double-digit net gaming revenue/EBITDA growth, including reduced promotional spending and improved gross gaming revenue (GGR) margins.

Flutter Risk Profile Skews to the Upside

Shares of Flutter are off 43% over the past 12 months and with the stock trading at $153.63 at this writing, it resides not far from Wheatcroft’s bear case price of $130. However, the analyst’s base for the gaming name is $380, implying a more than 2x rise from current levels.

His bull case scenario is a tripling to $450, which may seem far-flung today, but it could materialize over the long-term owing to Flutter’s strong positioning in the US and various international markets.

“Flutter holds the No. 1 position in the largest, fastest-growing online gambling market, the USA. We see a multiyear growth opportunity in the USA, driven by rising population penetration and new state legalisations,” concludes the analyst.