Evolution Gaming (Buy, TP: SEK670.00) - Casino crew, take your seats
Q4 coming in line with consensus (~100% EPS growth) was not enough. Costs are on the rise in H1 2018e due to expansion and aggressive recruitment to meet strong demand for new live casino tables; and revenue growth should slow to 33% in 2018e. We expect the Evolution shares to take off again once we see signs of a payoff from these investments. We leave our estimates fairly unchanged, keep our SEK670 target price and have upgraded our recommendation to BUY (HOLD).Evolution Gaming Group is a B2B provider of Live Casino solution systems in Europe. In Live Casino, a dealer runs the game from a casino table which is streamed in real time. End users, i.e. the players, make betting decisions on their devices (computers, smartphones, tablets, etc.) and are able to communicate with the dealer using a text chat function. Co.'s core portfolio consists of nine games such as Live Roulette, Live Blackjack, Live Baccarat, Live Casino Hold'em, Live Three Card Poker and Live Caribbean Stud Poker. Co.'s gaming portfolio offers the operators' end users an interactive experience that feels like playing in a real casino.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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