Initiation of Coverage: A Fair Draw: Initiate at Neutral

Research evidence excerpt

Initiation of Coverage: A Fair Draw: Initiate at Neutral

iversified market exposure and generally strong competitive From To % ch Cons.

positions, although persistent margin pressure remains an important constraint on 12/26E - 0.97 - 0.74

earnings growth. 12/27E - 1.09 - 0.94

12/28E - 1.17 - 1.11

North America: Prediction Markets add a new layer of uncertainty

Ben Shelley, ACA

PrizePicks has established a leading position within DFS and has delivered strong growth

Analyst

over recent years, supporting its role as the group's primary growth engine. We are ben.shelley@ubs.com

focused on the evolving competitive landscape, particularly the rapid emergence of +44-20-7568 3957

prediction markets. While these products may create incremental growth opportunities,

Jarrod Castle, CFA

they also represent a potential source of competitive pressure. UBS Evidence Lab data

points to softer app download and monthly active user trends at PrizePicks in recent jarrod.castle@ubs.com

months, which leaves us cautious on the durability of top line momentum. Nevertheless, +44-20-7568 8883

we continue to see a credible pathway to solid earnings growth for the segment via a

Artem Prokopets

favourable mix shift towards higher growth, higher margin businesses that should Analyst

support ongoing margin expansion. artem.prokopets@ubs.com

+44-20-7901 5625

Valuation: DCF based PT of €14

On our estimates, Allwyn trades on ~15x FY26 P/E for a +10% earnings CAGR over

FY26–28, which appears demanding relative to peers when viewed through a growth-

adjusted lens. As such, we find it difficult to argue for meaningful valuation upside from

current levels. That said, Allwyn offers an attractive dividend yield of ~7%, among the

highest in the sector, which we believe provides meaningful downside support.