Here’s why PointsBet’s shares are falling…
The post PointsBet (ASX:PBH) share price falls on mixed broker note appeared first on The Motley Fool Australia. –
The PointsBet Holdings Ltd (ASX: PBH) share price is trading lower on Thursday morning.
At the time of writing, the sports betting company’s shares are down 4% to $6.40.
This means the PointsBet share price is now down 9% in 2022.
Why is the PointsBet share price falling?
The weakness in the PointsBet share price today appears to have been driven by a broker note out of Credit Suisse.
Although the broker continues to recommend the company’s shares as a buy, it has taken an axe to its price target ahead of its first half results next month.
According to the note, Credit Suisse has retained its outperform rating and cut its price target by 30% from $12.80 down to $8.00.
This implies potential upside of 25% for investors. And while this is clearly still very attractive, it pales in comparison to the previous target which suggested 100% upside.
What did the broker say?
Credit Suisse notes that PointsBet is aiming to launch in New York later this month following highly successful competitor launches last week. So successful, the state became the biggest sports betting state in the US after just 12 hours of operation with 5.8 million user sign ins.
Although PointsBet will have some catching up to do when it eventually launches, the broker is pleased that the market may be larger than it was expecting. In addition, it notes that PointsBet’s promotional deal is one of the most generous on offer, which could bode well for signups.
However, it does have concerns over the intense competition, lower than expected market share gains, and the prospect of another capital raising being required in the not so distant future.
Nevertheless, it remains positive on the PointsBet share price at the current level. Particularly given its New York licence, which it suspects could make the company an attractive target if the industry consolidates.
The post PointsBet (ASX:PBH) share price falls on mixed broker note appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.