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Analysts at Peel Hunt have reiterated their assessment of 888 stock as a “Buy” ahead of the operator’s 2023 financial report.

888 CEO Per Widerström has said he plans to announce a new company strategy during the full-year financial presentation on 26 March.

This comes after a tough 2023 that saw year-on-year revenue decline, culminating in reduced FY24 guidance.

Peel Hunt said it expects the earnings call to share similarities with the business’ November 2022 presentation, that also aimed to set a new strategic direction.

This will likely include promised technological integration and better market focus, according to the London-based investment bank.

The analysts added the strategy does not need to change much in their view, but “just” needs to be executed effectively.

“The top team has changed almost completely, as we have discussed previously. We are not assuming that this new team can wish away the challenges faced by 888,” said Peel Hunt analyst Ivor Jones.

“But the trajectory of the share price over the course of this year partly depends on how much investors are prepared to anticipate the delivery of the business against the soon-to-be-discussed targets”.

Peel Hunt notes lowered guidance

Peel Hunt highlighted 888’s 17 January decision to lower its FY24 guidance, to direct money from costs savings into marketing initiatives.

The company severed ties with SI Sportsbook and is contemplating a full US exit, which will work to reduce costs long-term.

Peel Hunt pondered this implies an approximately cash neutral year, with little incentive for management to increase forecasts.

UK regulatory risk from gambling reform, particularly through the imposition of affordability checks, also is an unanswered question for the period ahead.

“As we highlighted recently, future checks on GB player financial risk may be ‘frictionless’, but we will not know the impact on revenue until the regulator says how operators should respond to the data collected,” they said.

“We believe that 888 has anticipated future regulation. But we thought that about Entain, which then surprised us with a downgrade, so now we are not so sure.”

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