Why William Hill Stock is a Good Buy

William Hill stock rallies after a positive review from Jefferies analyst James Wheatcroft. Wheatcroft pointed to the substantial upside for the UK sportsbook operator, and notes that William Hill has the largest share of the sports betting market in the US. Finally, Wheatcroft noted that the William Hill stock trades without value for that substantial market share priced in.

Reports issued by the sports betting industry suggest that sports betting volume has steadily increased over the last few months. The return of major league sports in the US has also boosted volume, as MLB and NBA fans lay down their bets.

With that in mind, Jefferies boosted its price target for William Hill stock from 305 pence to 330 pence. In fact, William Hill stock rose 7.63% on the London exchange to 147.50 pence. That leaves plenty of upside to the Jefferies prediction.

Despite Dominating the US Sports Betting Market, William Hill Stock is Cheap

“William Hill boasts the lead in the U.S. sports betting market, yet there is zero value-priced in,” James Wheatcroft said in a client note entitled “Number One in America Yet Zero Value Priced In.”

Deutsche Bank also upped William Hill stock from ‘buy’ from ‘hold’ in response to analysts seeing a clear upside in the company’s US operations.

William Hill stock was also upgraded by JP Morgan this last June, following an equity raise. Analysts at JP Morgan felt that the additional equity will allow the sportsbook to absorb any regulatory shocks.

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William Hill and Caesars Entertainment

One of William Hill’s most important partnerships is with Caesars Entertainment. The US casino giant has a 20% interest in William Hill US.

Before the acquisition of Caesars by Eldorado, William Hill entered into a partnership with Eldorado to operate sportsbooks. As part of the Eldorado acquisition of Caesars, William Hill US will now handle the sportsbook operations within Caesars’ physical properties.

Caesars has more than 50 casino-resort properties across 16 states. William Hill currently operates in 12 states, including Colorado and Washington DC. so the relationship with Caesars could open up four more states to William Hill. Moreover, the company has a growing online presence.

Caesars’ vast casino empire also includes sportsbooks in the states of New Jersey, Nevada, Iowa, Pennsylvania, Indiana, Mississippi, and New York. At last count, Caesars Entertainment operates sportsbooks in nearly 30 locations in those states.

William Hill has nearly 100 locations across Nevada, however, many are simply self-serve kiosks inside of sports bars. Moreover, William Hill’s presence is somewhat limited on the Las Vegas Strip.

William Hill U.S. has a 29% market share in Nevada, and the recent merger of Caesars and Eldorado Resorts will surely increase that share.

Following the acquisition, William Hill could add retail sportsbooks inside The Linq, Bally’s Las Vegas, Planet Hollywood Las Vegas, Paris Las Vegas and Caesars Palace, which already has a 7,900-square-foot Sportsbook on the property.

Caesars Entertainment also operates quite a few retail sportsbooks in other states with legalized sports betting, so the potential for expansion is considerable.

Other Deals for William Hill

In addition to assuming the sportsbook operations at Caesars Las Vegas properties, Nevada gaming regulators also granted William Hill preliminary approval to run the sportsbooks at six casinos on the Strip. These sportsbooks are currently operated by William Hill rival CG Technologies.

William Hill will honor any uncashed CG wagers, and mobile CG sports betting patrons will be moved to the William Hill mobile app. Finally, CG’s employees will transition to William Hill.

William Hill also entered into a partnership with CBS Sports to be the official sportsbook and data source for CBS Sports. Wheatcroft also noted that the CBS deal will expand William Hill’s brand recognition. Wheatcroft expects that William Hill US will eventually gain a 10% market share.

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