Bragg Gaming draws Buy recommendation and $3.25 per share price target from Eight Capital

Analysts at Eight Capital initiated coverage of Bragg Gaming Group (TSE:BRAG) (OTCMKTS:BRGGF) (FRA:SL4A) with a 'Buy' recommendation and a $3.25 a share target price. In a note to clients, Eight Capital analysts said that Bragg is leveraging “a dominant position as a B2B platform” and content provider in the regulated European gaming market. “We are initiating coverage of Bragg Gaming with a buy recommendation and $3.25/share target price based on 7x F22E Revenues, which implies +60% upside,” said the analysts. READ: Bragg Gaming Group is a profitable and highly cash-generative gaming solution provider “Unlike its more volatile B2C clients, Bragg offers a unique, lower-risk, pure-play option on the secular growth of online gaming given their scalable, SaaS-based B2B model, and see potential for stronger revenue growth and margin expansion ahead, with upside from M&A.” Bragg stock recently traded at C$1.93 on the Toronto Stock Exchange and at US$1.56 a share in the OTC Markets. Eight Capital sees a planned Nasdaq listing as “a potential valuation re-rate catalyst” given the US investor appetite for “quality growth assets in online gaming.” “We view the recent pullback in shares given market volatility as an attractive entry point,” said the analysts. “We see Bragg well positioned to penetrate the expanding US market as online gaming legislation post coronavirus (COVID-19) accelerates. Potential legalization in Canada represents another greenfield opportunity.” The analysts noted that in Europe, Bragg counts major B2C operators like Betway, Entain and JackpotJoy as clients, which it can leverage to expand into the burgeoning North American gaming market.       Eight Capital also pinpointed catalysts for the company’s growth. “Despite Bragg's broad footprint in Europe, the large UK gaming market remains a growth opportunity, with the company currently in the process of securing licensing. These new markets represent near-term upside to our forecasts,” said the analysts. Eight Capital said that given the company's “strong balance sheet and cash flows,” Bragg could have “a near-term focus on M&A” as management looks to accelerate entry into new markets like the US, and expand product categories and proprietary content portfolios. “We believe consolidating strategic assets could enhance Bragg's competitive position,” they added. Contact the author Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive