Hurdles ahead for online sports betting operator Super Group ( NYSE: SGHC) Limited"> SGHC ) in Canada caused Oppenheimer to downgrade shares to a Hold-equivalent rating.
Oppenheimer analyst Jed Kelly pointed to below-consensus results for the second quarter, regulatory headwinds ahead, and a softening macro environment as factors increasing uncertainty for the stock’s trajectory. Most prominently, regulatory issues and increased competition in Canada aroused some worry.
“We are incrementally concerned around Canada, where 2Q North American revenue (-18%) and data indicate well capitalized players are rapidly gaining share in Ontario,” he told clients. “We would get more constructive on revenue acceleration from re-entering more European markets following new regulations, or better visibility into Canada.”
Without this visibility, Kelly cut his rating to “Perform” from a prior “Outperform” while withdrawing his price target altogether.
Shares slid 0.55% in Tuesday’s premarket trading.
Read more on the company’s recent earnings results .
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Oppenheimer downgrades Super Group due to Canadian concerns