Paddy Power and Betfair shares undervalued?

Analysts at Dublin-based stockbroker Davy, which advises on wealth and asset management, capital markets and financial advisory services, have opined that shares in Paddy Power are undervalued by 30 percent, and those of future merger partner Betfair will rise by a similar percentage.

Writing in a new report, analysts David Jennings and Robert Stokes set a new price target of Euro 129 on Paddy Power shares, which broke the Euro 100 mark last week and closed at Euro 102.70 last Friday. Shares in Paddy Power had earlier this year been trading at Euro 69.

Betfair’s shares should also rise in value by around 30 percent, the report suggests, creating a new price target for the stock of GBP 41.30.

The report predicts the combined group could become one of the highest growth stocks in Europe.