Kindred Group (Buy, TP: SEK210.00) - Consensus snoozing through 2021

With our intact 2022e EPS forecast c20% above consensus, we expect a re-rating ahead. Kindred should continue to execute strongly on revenue growth, scale, and shareholder distribution. Q2 active customers +45% YOY bodes well for healthy underlying growth. We maintain our BUY and SEK210 target price.

Kindred Group (Buy, TP: SEK210.00) - Q2e growth on a par with Evolutio...

We forecast Q2 revenue up 57% YOY and EBITDA up 110%, and see the results reinforcing our reiterated BUY, with a strong Q2 and Q3 and 2021 outlook as well as the Relax acquisition triggering further positive consensus revisions. We are well above consensus for 2021–2022 and expect Kindred to resume buybacks near-term. We have raised our 2021e EPS by 6% and our target price to SEK210 (200).

Kindred Group (Buy, TP: SEK200.00) - Rocking western Europe

Post the Q1 underlying earnings beat and strong Q2 trading, we have raised our EPS forecasts by 7% and our target price to SEK200 (185). We find Kindred well positioned for more European market share gains, approaching the Football Euros this summer. To us, the share price has yet to reflect the attractive long-term growth story, and we consequently keep our BUY.

Kindred Group (Buy, TP: SEK185.00) - Strong trends and execution

We have raised our target price to SEK185 (170) and reiterate our BUY after a 7–8% lift in our 2021–2022e EPS due to solid revenue growth trends. We expect a strong Q1, with EBITDA +143% YOY; our 2021 forecast is c10% above consensus (Bloomberg) and we identify several positive catalysts e.g. a busy sports calendar, potential earnings-accretive bolt-on acquisitions, US expansion, buybacks, and more clarity on the potential effects of the upcoming Dutch re-regulation.

Kindred Group (Buy, TP: SEK170.00) - The house is in order

We have raised our 2021e EBITDA by c40% after the very strong Q4 results, showing a continued positive trend and 2021 outlook, and strong execution when balancing rising gaming taxes with growth and scale advantages. The new payout policy and proposed 2020 DPS of GBP0.33 in our view imply share buybacks of up to SEK1.6bn in 2021. We have raised our target price to SEK170 (105) and reiterate our BUY.

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Kindred Group (Buy, TP: SEK105.00) - Set for more positive surprises

We see an especially good buying opportunity given the muted share price, cautious 2021e consensus, and our Q4e of 100%+ EBITDA growth YOY. The near-term outlook is positive with e.g. strong current trading and clear signs of mitigating factors to rising duties. We have lifted our 2021e EBITDA by 7% and increased our target price to SEK105 (100). We reiterate our BUY.

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Kindred Group (Buy, TP: SEK100.00) - Group already well above pre-Swed...

After Kindred’s Q3 reverse profit warning, we have raised our 2021e EPS by 11% and reiterate our BUY, with a new SEK100 (88) target price. We also expect ~100% EBITDA growth YOY for Q4 and are positive on the long-term case. Group earnings are already well above the level prior to Swedish re-regulation, despite the ongoing US growth investment phase.

Kindred Group (Buy, TP: SEK88.00) - Working the land of opportunity

We believe the revenue-driven strong EBITDA growth (c60% YOY in H2e), evolving US expansion case (nearly 10% of 2022e revenue), strong balance sheet and potential acquisitions ahead of Dutch re-regulation in 2022 are yet to make a positive mark on Kindred’s share price. We have only fine-tuned our estimates, and remain above consensus. We reiterate our BUY and SEK88 target price.

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Kindred Group (Buy, TP: SEK88.00) - Re-gaining confidence

We reiterate our BUY with a new SEK88 (78) target price reflecting our higher forecast based on e.g. the bullish Q3 trading statement, US growth momentum, and further expansion (Indiana launch in the coming days). In addition to enjoying accelerating near-term revenue growth momentum, we believe Kindred is back on the right track in its efficiency and scale benefits, necessary in times of re-regulation (rising tax).

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Kindred Group (Buy, TP: SEK78.00) - Football ‘ketchup effect’

Following the reverse profit warning, which revealed Q2 adj. EBITDA materially above our forecast and consensus, we have raised our target price to SEK78 (62) and reiterate our BUY. Q2 was exceptional in several ways, but we have raised our 2021–2022e adj. EBITDA by c20%, reflecting a positive revenue-growth outlook and signs of improving efficiency initiatives.

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Kindred Group (Buy, TP: SEK62.00) - Signs of resilience

We reiterate our BUY and have raised our target price to SEK62 (60), reflecting our new estimates (2021–2022e EPS raised by 4% due to strong casino revenue). Kindred is showing good resilience to the Covid-19 crisis: daily revenue is down just 12% YOY despite suspended sports events (sports betting typically makes up 50% of revenue). Long-term growth prospects remain attractive to us and we see room for more acquisitions.

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Online slots in a sweet spot

The Covid-19 crisis has put temporary pressure on the sector as a result of postponed or cancelled sports events – but for online casinos we expect a positive impact. An interesting aspect is that the sizeable land-based gaming market (c75% of Europe’s total) should be under termimal pressure now, leading to accelerating online migration. Our top picks are the stocks with the largest tilt towards online casino, i.e. NetEnt, LeoVegas and Betsson.