From a fundamental viewpoint, the bookmaker company seems fragile. Surperformance ratings show poor perspectives for revenue growth, high valuation level and weak financials. In facts, the company seems overvalued compared to its peers with an EV/Sales ratio at 2.34 for 2014 estimates. Moreover, debt has more than doubled last year, leading to a leverage of 1.82 times and should not recover until 2016. Analysts have revised downward their EPS previsions for the coming year proving the company’s profitability is reducing.

Technically, after our successful strategy of 2014 May 2, the stock has rebounded and is now approaching the GBp 362 resistance. This level should stop the price progression as it did last time and the stock should enter into a consolidation phase towards GBp 336. Moving averages orientation still support this idea.

Therefore, a short position could be taken close to GBp 362 with a target set at GBp 336 and GBp 320 in extension. Nonetheless, a stop loss will be place over the resistance currently tested in case of a bullish overflow.