Fitch Lowers Flutter Entertainment Outlook to Negative on Leverage Concerns

Fitch Ratings has revised its outlook for Flutter Entertainment plc to Negative from Stable, signaling a potential future downgrade if the company's financial leverage does not improve. The ratings agency affirmed Flutter's Long-Term Issuer Default Rating (IDR) at 'BBB-' and its senior secured debt at 'BBB'.

Drivers of the Outlook Change

The negative outlook stems from Fitch's expectation that Flutter's leverage will breach its negative sensitivity threshold in 2026 and possibly into 2027. The agency pointed to several key factors driving this forecast:

• The pace of margin recovery, particularly in the crucial U.S. market.
• The negative financial impact of increased taxation in the United Kingdom in 2026 and 2027.
• Significant investments in new products, such as its FanDuel Predicts Platform, which are expected to reduce adjusted EBITDA in 2026 by an amount at the upper end of a $200 million to $300 million range.

These pressures contributed to muted results in the second quarter of 2026, which were also affected by customer-friendly sports outcomes and marketing spend for the World Cup 2026, according to the source.

Balancing Growth and Deleveraging

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In response to rising leverage, Flutter has shifted its capital allocation strategy. The company paused its $5 billion share repurchase program, which was first announced in September 2024.

Flutter executed only $250 million in buybacks in 2026, a sharp decrease from the $1.1 billion repurchased in 2025. Fitch stated it assumes Flutter remains committed to its medium-term leverage target of 2.0x-2.5x and expects buybacks to remain minimal in 2027 before potentially rising above $1.5 billion annually in 2028-2029, depending on operating performance.

Financial Position

Despite the outlook revision, Fitch noted that Flutter is expected to generate strong free cash flow from 2026 to 2028. At the end of the second quarter of 2026, the company's liquidity included $1.5 billion in Fitch-adjusted readily available cash and £0.8 billion available under its £1.1 billion revolving credit facility.