Flutter Entertainment (NYSE: FLUT) shares have declined nearly 8% in the last month due to plans to allocate up to $385 million for customer acquisition and retention incentives in the second half of the year.
Even though this news led to a reduction in 2026 guidance, there is optimism as Flutter has a history of benefitting from heavy marketing investments. Stifel analyst Jeffrey Stantial points out previous success stories from Flutter’s international business, where significant marketing spending resulted in substantial returns.
“Our research indicates that past investment cycles often lead to permanent adjustments in reinvestment strategies. This suggests potential for higher reinvestment in FanDuel promotions,” Stantial states. “While this may pose a headline risk, it is strategically sound to leverage FanDuel’s structural margin advantage to regain momentum and solidify market share for FLUT.”
Stantial rates Flutter Entertainment as a “buy” with a target price of $133, reflecting a 40% upside potential from the closing price on Aug. 27.
Flutter’s Marketing Strategy
While known for owning FanDuel in the U.S., Flutter also holds strong positions in established sports betting markets like Australia, Europe, and the U.K.
Referencing past success, Stantial highlights the positive outcomes from Flutter’s robust marketing investments in Paddy Power and Sportsbet, indicating a potentially similar result from the current $385 million spending initiative.
“Both brands saw significant enhancements, with Sportsbet becoming a top player in Australia and Paddy Power solidifying its position in the competitive U.K. market,” notes Stantial. “Product innovation played a key role, with Sportsbet benefiting from same-game parlay adoption and Paddy Power from platform upgrades. The U.S. market strategy beyond loyalty program introduction remains uncertain.”
Flutter CFO Rob Coldrake suggested that the increased spending could extend into 2027, but emphasized that current levels of expenditure would not be a permanent fixture for the company.
Value Opportunity in Flutter Stock
With a 54% decline year-to-date, Flutter shares present an attractive value proposition compared to competitors like DraftKings (NASDAQ: DKNG) and Entain.
Stantial points out additional catalysts for Flutter’s growth, including the stabilization of FanDuel’s market share, positive trends in online sports betting, and potential regulatory clarity for prediction markets.
“FLUT’s success hinges on execution, but the risk-to-reward ratio is favorable, with multiple catalysts for improved sentiment ahead, such as FanDuel’s market position, U.S. online sports betting growth, and potential regulatory developments,” concludes Stantial.