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STOCKS NEWS EUROPE-William Hill falls on Barclays target cut

Reuters - UK Focus

Gambling company William Hill (Other OTC: WIMHF - news) falls more than 2 percent, making the stock the worst-performer on the benchmark FTSE 100 index in percentage terms, after Barclays (LSE: BARC.L - news) becomes the latest broker to cut its price target after the UK government last week announced new taxes on the sector.

William Hill had already suffered price target cuts last week from UBS (Xetra: UB0BL6 - news) and Credit Suisse (NYSE: CS - news) in the wake of the British government's announcement that it would raise taxes on high-stakes gambling machines - a move which hit both William Hill and rival Ladbrokes (LSE: LAD.L - news) .

On Monday, Barclays' analysts add to the price target downgrades from UBS and Credit Suisse by lowering their own price target on William Hill to 370 pence from 393 pence. Barclays keeps an "equal weight" rating on William Hill's shares.

"We believe potential negative regulation surrounding fixed odds betting terminals will continue to weigh on sentiment towards the gambling sector," the Barclays analysts write in a research note.

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William Hill shares are down by 2.3 percent at 331.20 pence - marking the stock's lowest level since the start of February. Ladbrokes falls by 1.5 percent.

Dafydd Davies, senior trader at Prime Wealth Group, says that even though Barclays' latest price target is above the current William Hill share price, the fact that Barclays and other brokers have had to reduce that target is leading to selling pressure on the stock.

"The latest target cut is adding to a continuation of the selling pressure on the stock. The brokers could cut the target again in the future," says Davies.

Trading volumes in William Hill stand at 41 percent of the stock's 3-month daily average - above those for the FTSE where volumes come in at around 14 percent of the index's 3-month daily average.

William Hill's shares have fallen by around 12 percent since the UK government announced its plans for new taxes on the high-stakes gambling machines on March 19.

Reuters messaging rm://sudip.kargupta.thomsonreuters.com@reuters.net