September Swedish gaming tax

September showed solid progress for state-owned betting incumbent Svenska Spel while Kindred and LeoVegas’s recent positive trends were reversed. Looking ahead, we expect 1) more signs that the Swedish market is concentrating towards leading brands; and 2) in addition to high season for gaming, the recent closure of unlicensed operator Mobilebet could support the licensed market and brands such as LeoVegas, Kindred, and Betsson.

Northern Lights

LeoVegas (Buy, TP: SEK52.00) - Back to earnings growth

We expect EBITDA growth to return from H2 (25% in Q3e), which is quite an achievement given the sizeable Swedish exposure (18% revenue tax since 1 January). We believe healthy growth in Sweden, Rest of Europe and World coupled with better cost control more than offset the still-challenging UK business. Further signs that LeoVegas is executing well in absorbing the rising duties/gaming tax should support the share price and we reiterate our BUY and SEK52 target price.

Valmet (Buy, TP: EUR30.00) - Q1 on the weak side

Following a mixed but negatively skewed overall Q1, we have lowered our 2024–2026e clean EPS by c4% on average. We reiterate our BUY and EUR30 target price.

Komplett (Hold, TP: NOK10.00) - Challenging market set to persist

The Q1 report was weak, as revenues were badly hit by a challenging market, which looks set to persist near-term. We reiterate our HOLD and have cut our target price to NOK10 (12) on negative estimate revisions. At our new target price, the stock would be trading at a 2026e P/E of c5x, which we find to be warranted given the subdued market outlook and weak balance sheet.

XXL ASA (No_rec, TP: NOK) - Weak Q1, but better than forecast

XXL reported weak Q1 results, albeit slightly better than expected, as it continues to underperform in a challenging market. On a positive note, the company continues to make progress on its strategic initiatives and has improved its financial position following the private placement. We have cut our 2024–2025e EBITDA by 21–13% on slightly revised revenue and margin assumptions.