FDJ United (FDJU.PA): 1H26; Another miss and full year guidance lowered again

Research evidence excerpt

FDJ United (FDJU.PA): 1H26; Another miss and full year guidance lowered again

Goldman Sachs FDJ United (FDJU.PA)

FDJ investment thesis:

The Kindred acquisition has transformed the profile of La Française des Jeux (FDJ), from

being primarily the exclusive French lottery operator to now having international

presence in betting and gaming markets across Europe. We are positive on the strategic

rationale for the deal, particularly in scaling up in the French online sports betting

market and offering a platform for FDJ to grow internationally, but it also shifts the

equity story from its past positioning as a protected monopoly offering a secured stream

of cashflow with an attractive dividend yield, and introduces greater competitive and

regulatory risk.

FDJ has materially underperformed our coverage over the past year, as regulatory/tax

headwinds led to Online Betting & Gaming missing expectations for three consecutive

quarters, and consensus estimates were revised downwards, consistent with our original

Sell thesis. Despite this, we believe there is further to go before consensus expectations

are fully reset, given: (1) the mid-term impact of regulatory/tax headwinds is not yet

fully captured in consensus, and we see downside to consensus EBITDA estimates in

2026 and beyond; and (2) FDJ has fewer local leadership positions in key competitive

markets compared to peers which, in our view, increases the risk of further growth

underperformance (particularly in periods of regulatory change) and/or that greater

investments may be required to deliver a turnaround and achieve mid-term targets.

While we see the incremental downside from here as more limited following FDJ’s

underperformance, we are Sell rated on FDJ relative to our broader European Travel &

Leisure coverage.