MARKET REPORT: Goldman Sachs raises stakes for Entain recovery

It looks like Entain is finally starting to win over the City’s biggest critic.

Analysts at Goldman Sachs have become the only broker to advise clients to sell shares in the owner of Ladbrokes and Coral since November last year, as they see the potential for a turnaround in the fund.

They expect the stock price to recover once the gambling giant improves its online growth and the performance of its joint venture Bet MGM in the US.

Goldman said it saw early signs of a turnaround in Brazil and the United Kingdom in the second quarter, but warned that more needs to be done in other countries to return to market levels.

As a result, the broker raised the stock’s rating from ‘sell’ to ‘neutral’.

Shares rose 2.7 percent, or 17p, to 638.2p, taking gains for the week to more than 13 percent. That gave Entain its best weekly performance since last year, when it rose 17 percent in the week ending December 15, 2023.

But the share price has fallen by more than a third this year and is still almost 75 percent below its September 2021 peak.

The FTSE 100 fell 0.4 percent, or 35.94 points, to 8311.41 and the FTSE 250 fell 0.2 percent, or 45.25 points, to 21048.91.

However, the feel-good factor surrounding the UK economy showed little sign of slowing after retail sales rose 0.5 percent in July. This followed figures earlier in the week showing inflation was lower than expected in July, while GDP grew for the second quarter in a row.

Admiral was a blue-chip faller – a day after the insurance company revealed it had benefited from higher car premiums following a surge in new customers.

Shares, which rose 6.5 percent on Thursday, fell 1.1 percent, or 33p, to 2,960p.

AstraZeneca also failed to extend its profits, a day after shares hit a record high following rapid sales of its lung cancer drug Imfinzi.

The pharmaceutical giant, which this week became the first British company to be worth more than £200bn, said on Thursday that US regulators will prioritise the review of its treatment.

Shares, which peaked at 13,166p, fell 0.9 percent, or 120p, to 13,046p. Among the mid-caps, buy-to-let lender One Savings Bank (OSB) fell despite this week announcing lower-than-hoped-for net interest margin (NIM) and loan book.

Shares, which fell 18.8 percent in the biggest one-day fall since July last year, were now down 1.7 percent, or 6.6 pence, at 386.6 pence.

Costain and its joint venture, water supplier MWH Treatment, will improve water and wastewater services for a major supplier and its customers.

The engineer’s seven-year deal with Southern Water, which covers East and West Sussex, Kent, Hampshire and the Isle of Wight, is worth at least £500m.

The update comes as the construction and engineering firm prepares to publish its half-year results on Wednesday. Shares fell 1.1 percent, or 1p, to 88p.