The London bank has kicked off its coverage of the stock with an ‘overweight’ rating – a ‘buy’, to you and me – and a punchy 603p price target.
Shares in Playtech were up 4.2% to 450p on the back of the research note.
In that report, the number crunchers argued that, after a difficult 2018, Playtech’s performance should steadily pick up over the coming years.
“Playtech is well placed to meet guidance for FY19, which we think will represent a trough in terms of organic growth, margin and cash flow,” they said in a note to clients.
“Beyond FY19, we expect broad-based growth across B2B and B2C.”
JP Morgan Cazenove also believes Playtech is “less risky” than it was even a few months ago.
“Group revenues have been diversified by the acquisition of Snaitech, both by nature and geography, which dilutes the elevated risks associated with the B2B business.
“Several adverse regulatory changes have already occurred (UK, Italy) and Asian revenues have reduced to <10% of the group.”
Even if you took away all of the remaining Asian revenues, the analysts argue that would still imply a “reasonable valuation”.