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OPAP | Full House in 2025e, but 2026 is another question

The catalyst – Q2’25 results on 3rd Sep look poised to be a positive catalyst: although the numbers are not likely to impress (EE revenues/EBITDA +4% yoy, DPS €0.65) and mgt may abstain from raising the guidance, commentary on the Q3 outlook is likely to be upbeat, as indicated by latest data. This is because of another series of record jackpot rollovers, which have brought Q3 (to-date) Joker GGR >€40m yoy. This means that contrary to market expectations – which envisaged a c€25-30m headwind due to the tough comp – numerical games in 2025 look primed to exceed the 2024 number. On our forecasts, this means that >€840m of group adj. EBITDA looks within reach in FY25, namely c+2% vs last year. We believe that the shares are likely to overshoot in the near term, ahead of what looks set to be another very strong year.

Can the 2025 strength carry forward? Partly, we think… – The 2024–25 outperformance rests on two pillars: Joker & betting. Joker has clearly moved to a higher base after its late-2023 revamp, as the higher column price has reduced the number of tickets played, thus making jackpot rollovers easier to build. That said, our analysis shows that the extraordinary uplift of 2025 partly stems from unusually long rollover streaks. These cycles are not a repeatable growth engine, which means Joker revenues are likely to step down in 2026. We nevertheless expect them to settle above pre-revamp levels, implying Joker will sustain a structurally higher run-rate but still leave OPAP facing a >€20m earnings gap vs the 2025 peak. By contrast, the revamped Champions League format for sportsbetting looks genuinely structural. More fixtures and a stretched calendar have reshaped betting behaviour, driving sustained 2-digit growth and a clear re-rating of the vertical. As such, we now expect OTC betting to be flat in 2025 (due to the Euro 2024 comp) before growing c2% annually thereafter.

Bottom line: 2025 to set another record, 2026 will be a different story; estimates lifted 6-7% – This year’s earnings growth trajectory looks secure, in our view, driven by the jackpot-fuelled Joker and stronger betting. But with Joker’s windfall set to fade in 2026, the equity story will increasingly hinge on whether OPAP can compound growth through its structural drivers—sports betting and digital expansion. Our numbers pencil in little-changed group revenues in 2026-27 (core retail flat, online +9%/+6% respectively) filtering through to EBITDA growth near 1% in both years. This should help underpin 4%/2% EPS growth and a dividend near €1.5 per share (8% yield). Overall, we have lifted our 2025e EBITDA c4%, with more tepid upgrades for 2026-27 (c3%, assuming partial normalization of Joker). Our EPS increases by c6-7% over the forecast horizon, helped by the removal of the minority leakage following the purchase of Stoiximan non-controlling interests (for €192m plus cash).

Valuation – Our PT (concessions SOTP, 7.3% WACC) has been lifted mirroring the upgrade to our numbers, and implies a 2025 EV/EBITDA of c8.6x, modest premium vs history justified by the better FCF generation until 2030. Despite the c8% yield, we see the stock as fully valued, unless one uses too aggressive valuation assumptions, e.g. 1) licence renewal cost for the core concession at