Flutter stock took a beating when Brazilian President Luiz Inácio Lula da Silva signed an executive order more than a week ago banning online gambling over public health and debt concerns, forcing the betting giant to shut down operations immediately.
The news sent shares down nearly 8% on Sept. 28.
Adding to the headwinds, Flutter's sports results from September leaned heavily in favor of bettors, whose winning streaks squeezed the gaming company's profit margin.
Citi analyst Monique Pollard, however, called the recent selloff in the stock "overblown." The firm upgraded Flutter stock to Buy from Neutral while lowering the price target to $91 from $93.
The analyst expects the gaming company's third-quarter earnings, which will be released Nov. 4, to beat Wall Street's estimates, she said in a research note. In particular, Pollard predicts earnings before interest, taxes, depreciation, and amortization will be 13% higher than the average analyst consensus estimate, thanks to a strong performance in the U.S. market. Citi projects that figure to total $54 million, while consensus anticipates $8 million.
Until recently, Flutter's U.S. business had missed expectations or the company lowered its outlooks for four consecutive fiscal quarters. But Citi expects the company's third quarter to finally break that losing streak.
Shares of Flutter, parent company of sports betting app FanDuel, rose 3% to $78.55 in premarket trading Wednesday. Shares have fallen nearly 64% this year and were on pace to have their worst year on record, according to Dow Jones Market Data. Shares of rival DraftKings have fallen 43% in 2026 and were on pace for their worst year since 2022.
Citi isn't the only Flutter bull on Wall Street. Out of the 37 analysts polled by FactSet, 73% rate the stock an equivalent to Buy with an average price target of $132.17, suggesting an upside of nearly 73% from the stock's closing price of $76.25 Tuesday.
Though Brazil was a high-growth market for Flutter, it hasn't necessarily been its primary revenue engine. Flutter previously estimated that being shut out of Brazil for the rest of the year would hit revenue by around $70 million and adjusted Ebitda by $20 million.
Currently, the ban remains in place as a 120-day temporary order that requires congressional approval in Brazil to stay in place permanently. Flutter has been reviewing appeals and engaging with Brazilian authorities, but operations remain suspended.