High Street betting shop Ladbrokes was performing well on Tuesday morning, with shares given a boost by Investec which raised its rating for the stock from 'hold' to 'buy'.

"Ladbrokes is due to complete the roll out its new online sportsbook in Q1 and, compounded by internally generated trading improvements, the outlook in both retail and digital is promising," said analyst James Hollins.

"Ladbrokes should be putting the delay in its sportsbook relaunch behind it, although there is risk of an underwhelming performance if 2012 is used as a guide to future digital returns. However, we think that retail growth and cash generation is being undervalued and, factoring in a partial return to form in digital, we move from 'hold' to 'buy'," he said.

Ahead of the company's full-year results due on Thursday (February 21st), Investec has reiterated its forecasts for revenue of £1.05bn and earnings before interest and tax (EBIT) of £207.1m, which are around 2.0% ahead of consensus estimates.

For the year ending December 31st 2013, the broker has raised its EBIT estimate by 5.0% to £214m (some 6.0% ahead of consensus) due a more positive outlook on revenue and an operating margin increase of 20 basis points to 19.2%.

The broker's price target for the shares has been hiked from 165p to 250p.

Shares were up 3.79% at 229.58p.

BC

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