Broker tips: GB Group, Entain

(Sharecast News) - Analysts at Berenberg lowered their target price on software firm GB Group from 340p to 290p on Thursday following the group's full-year trading update a day earlier.

Berenberg said GB Group's FY26 trading update saw the firm deliver revenues and operating profits in line with market expectations, but also noted that while the second half of the year saw a year-on-year acceleration in growth, this primarily reflected "a soft comparative performance" in H225.

However, Berenberg highlighted that GB Group now expects year-on-year revenue growth to accelerate to mid-single digits in FY27, which, if achieved, "would provide some reaffirmation of the significant strategic initiatives" brought in by chief executive Dev Dhiman since he began the job in January 2024.

"We marginally reduce our EPS expectations and lower our price target to 290p (from 340p), which primarily reflects a higher WACC of 10.6%," said the German bank, which kept its 'buy' rating on the stock.

Berenberg added that GB Group trades on an 11.4x FY26 price-to-earnings ratio and a 10.7x FY27 price-to-earnings ratio.

Bank of America downgraded its stance on Ladbrokes owner Entain on Thursday to 'neutral' from 'buy' and cut its price target on the stock to 700p from 870p as it pointed to rising competition from prediction markets and slowing UK growth.

The bank said it sees downside risks at BetMGM - the company's joint venture with MGM Resorts - amid competition from US prediction markets.

While Bank of America said Entain's UK performance had been good so far, it noted that growth may be peaking as new taxes come into effect. It also said it sees downside risks at BetMGM - the company's joint venture with MGM Resorts - amid competition from US prediction markets.

Bank of America also said market share gains were unlikely in the near term and cut its 2025-28 earnings per share estimates by 5% to 15%, leaving them 2% to 14% below consensus expectations.