Solid Swedish April sales m-o-m

We cautiously await evidence of improvement

Underwhelming Q1 sees us make significant estimate cuts. We believe the '24 guidance is too optimistic. Evidence of improvement is needed – keep HOLD, TP SEK 6 (8).

Underwhelming Q1

Mind the comps

Q1e: 12% pro forma revenue decline y-o-y on notably tough comps. We cut '25e North America growth, weighing 6% on '25e-'26e EBITA. Maintain HOLD – keep awaiting a better entry point.

Kindred Group Minor model adjustments

We have raised our 2024e adj. EBITDA by 2%, owing to the Q1 results and adj. EBITDA of GBP59.3m, up 20% YOY, 8% above our forecast (no consensus available) on surprisingly strong cost control (GBP10m lower opex than we forecast). The start to Q2 (daily average revenue up 8% YOY in constant currency, up to and including 4 February) was in line with our estimates, and the 2024 guidance for adj. EBITDA of GBP250m is unchanged. We do not consider these changes to be material, and we have not changed...

Betsson (Buy, TP: SEK170.00) - Super-scaling into the future

We reiterate our BUY, and have raised our target price to SEK170 (155) after increasing our 2024–2025e EBIT by 11–7%. Q2 to date has exceeded our expectations, and we forecast further healthy earnings in the coming quarters (cost control alongside high player activity driving solid revenues from key upcoming football tournaments). Betsson’s 2024e net cash of EUR142m should enable further M&A and solid cash distribution.

Limited surprises

Q1 was slightly above expectations but triggers limited revisions. Potential NL deposit limits could hurt Kindred as market leader. Keep HOLD on neutral risk-reward with SEK 130 cash offer.

Kambi (Buy, TP: SEK190.00) - New growth and nations incoming

Kambi showed steps in the right direction in Q1 after expectations were re-based in conjunction with the Q4 report. We have raised our 2024e EBIT by 5% following the earnings beat in Q1, and find the implicit EBIT guidance of EUR~15m fairly conservative in light of e.g. the upcoming onboarding of Svenska Spel in Sweden and LiveScore in the UK. We reiterate our BUY and have raised our target price to SEK190 (180).

Kambi (Buy, TP: SEK190.00) - New growth and nations incoming

Kambi showed steps in the right direction in Q1 after expectations were re-based in conjunction with the Q4 report. We have raised our 2024e EBIT by 5% following the earnings beat in Q1, and find the implicit EBIT guidance of EUR~15m fairly conservative in light of e.g. the upcoming onboarding of Svenska Spel in Sweden and LiveScore in the UK. We reiterate our BUY and have raised our target price to SEK190 (180).

Evolution (Buy, TP: SEK1700.00) - Live buying opportunity

We reiterate our BUY and SEK1,700 target price after healthy but in-line Q1 results (Live revenue growth >25% YOY at constant FX). In our view, the weak share price despite a healthy start to the year, promising new games pipeline, high-conviction growth outlook (growth investments, e.g. recruitment), and long-awaited Live dealer contract with leading operator bet365 offers a solid buying opportunity.

Set for acceleration

Expansion investments weigh on Q1 margin, but great setup for solid outlook for remainder of '24e. Keep BUY — 17-14x '25e-'26e P/E and >5% FCF yield

Exciting times ahead

Better than feared, expect a slight relief

Bet365 signing proving Evo's strength

Kindred Group (Hold, TP: SEK130.00) - And the winners are… the French?

Although we consider Paris-listed FDJ’s proposed cash offer unattractive, not reflecting Kindred’s true earnings potential (2025e EV/EBIT of 8x), we have downgraded to HOLD (BUY) and lowered our target price to SEK130, in line with the proposed bid (base case). At the same time, we do not rule out a strong medium-term outlook and 2024 earnings that could prompt a scenario where FDJ must raise its proposed bid to secure the necessary acceptance rate from Kindred’s shareholders.

Betsson (Buy, TP: SEK155.00) - Disciplined start to the year

We reiterate our BUY and SEK155 target price, reflecting mostly unchanged 2024 estimates. Our impression is that the Q1 sports margin was slightly below average, but that e.g. Betsson’s disciplined marketing spending should have protected a solid EBIT. To us, Betsson looks well positioned for an event-driven year with large customer intake potential, laying the foundation for growth in 2024–2026e.

Evolution (Buy, TP: SEK1700.00) - Continued strong start to 2024

According to our tracker, the positive trend that we identified in Q1 (stabilising YOY growth after a period of deceleration) has continued in Q2: total daily average players has grown by 10% QOQ, corresponding to >35% YOY. We believe the strong trend YTD implies upside potential to our forecasts and consensus for Q1–Q2 Live revenue growth of 6–4% QOQ. Evolution continues to widen the gap to competition and we believe stabilising Live revenue growth YOY should prompt a share price re-rating.

Kambi (Buy, TP: SEK180.00) - Preparing for more action

We reiterate our BUY and SEK180 target price, and expect Q1 to show Kambi is on track to meet its 2024 revenue and EBIT guidance. The near-term outlook is positive in our opinion (key sports events like UEFA Euro 2024, and onboarding new key customers), and a new CEO should be announced soon. We have raised our 2024e EBIT by 3%, and expect more clarity on future potential buybacks (new framework to be put to the AGM).

Evolution (Buy, TP: SEK1700.00) - Q1e revenue of EUR500m

We reiterate our BUY and SEK1,700 target price ahead of the Q1 results (due at 07:30 CET on 24 April). We see re-rating potential from e.g. stabilising Live revenue growth YOY (c25% YOY in Q1e at constant currency), confirmed by our proprietary tracker data, and an improving cash distribution story. Notable upcoming new Live game releases include ‘Lightning Storm’, which we believe is scheduled for late Q2.

Evolution (Buy, TP: SEK1700.00) - Flagging a trend shift

After two years of slowing growth in Live revenue and daily players (from very high levels), we see more encouraging trends YTD. According to our tracker, Evolution’s total daily average players are up 15% QOQ QTD (2–3% in Q3–Q4 2023), while YOY growth has stabilised at >30%. Our data also suggests that Evolution has maintained its superior market share, which, overall, increases our conviction in the growth outlook. We reiterate our BUY and SEK1,700 target price.