MARKET REPORT: Goldman Sachs raises bets for a recovery in Entain

It seems Entain is finally starting to earn the trust of its toughest critic in the city.

As the only broker to have been advising clients to sell shares in the Ladbrokes and Coral owner since November last year, Goldman Sachs analysts now see potential for a change of fortunes.

They believe the share price could start to recover once the gambling giant improves its online growth and the performance of its Bet MGM joint venture in the United States.

Goldman said it began to see green signs of a recovery in the second quarter in Brazil and the UK, but warned that more needs to be done in other countries to get back to market levels.

As a result, the broker upgraded its rating on the stock from “sell” to “neutral.”

Shares rose 2.7 per cent, or 17 pence, to 638.2 pence, taking gains for the week to more than 13 per cent. That allowed Entain to record its best weekly performance since last year, when it rose 17 per cent in the week ending December 15, 2023.

But shares have fallen more than a third this year and remain nearly 75 percent below their September 2021 peak.

The FTSE 100 fell 0.4 per cent, or 35.94 points, to 8,311.41 and the FTSE 250 was down 0.2 per cent, or 45.25 points, at 21,048.91.

However, optimism surrounding the British economy showed no signs of slowing after retail sales rose 0.5 percent in July. This followed figures earlier this week showing inflation was lower than expected in July, while GDP grew for the second consecutive quarter.

Admiral was one of the blue-chip firms to fall, a day after the insurer revealed it had profited from higher car premiums following a surge in new customers.

The shares, which gained 6.5 percent on Thursday, were down 1.1 percent, or 33 pence, at 2,960 pence.

AstraZeneca also failed to extend gains a day after shares hit a record high following the rapid launch of its lung cancer drug Imfinzi.

The pharmaceutical giant, which this week became the first UK company to be valued at more than £200bn, revealed on Thursday that US regulators will grant a priority review for its treatment.

The shares, which hit a high of 13,166p, fell 0.9 per cent, or 120p, to 13,046p. Among mid-caps, buy-to-let lender One Savings Bank (OSB) fell despite revealing this week that it expects its net interest margin (NIM) and loan book to be lower than expected.

The shares, which fell 18.8 percent in their biggest daily drop since July last year, were down 1.7 percent, or 6.6 pence, at 386.6 pence.

Costain and its joint venture, water industry supplier MWH Treatment, will improve water and wastewater services for a major supplier and its customers.

The engineer’s seven-year contract with Southern Water, which covers East and West Sussex, Kent, Hampshire and the Isle of Wight, is worth at least £500m.

The update comes as the construction and engineering firm prepares to publish its half-year results on Wednesday. Shares fell 1.1 percent, or 1 pence, to 88 pence.