FDJ

Company Update:
FDJ reported weaker-than-expected Q2 2026 results as revenues fell 5.8% year-on-year to €887m (3.6% below consensus), hit hard by higher gaming taxes, fewer EuroMillions jackpots, and reduced retail footfall during summer heatwaves. While Online Betting & Gaming beat expectations (+3%) supported by major sporting events like the FIFA World Cup, the core French Lottery & Retail Sports Betting division fell 5.5% short of consensus. 

Marginally downgraded FY26 Guidance: Despite management expecting a stronger H2 performance and maintaining its recurring EBITDA margin guidance of 23–24%, full-year targets were lowered to project flat Gross Gaming Revenue and a low-single-digit revenue decline.

Given the top-line miss, earnings pressure, and guidance cut, we are likely to reduce our financial estimates by low- to mid-single digits and we anticipate a negative share price reaction.

Expert Opinion:
This is a slightly negative piece of news. Yet the cut in guidance by the company is marginal and valuation already reflects a, if not worst-case, at least very, very bad scenario. Stock trades at a PE26 of 11.5x (pre-earnings revision, so it may be a PE of 13) but yields a secured 9.4% rate. Still happy to buy the stock at these levels, cash in c10% in div yield and wait for better days (even though the waiting period starts to feel a bit long to our liking). 


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