DraftKings Upgraded to Buy at Stifel

DraftKings Upgraded to Buy at Stifel Jan. 19, 2024, 12:25 p.m., readers: 23

Stifel analysts upgraded DraftKings (NASDAQ:DKNG) from Hold to Buy, increasing the stock's price target from $40 to $45 per share. The analysts highlighted DraftKings' promising prospects for 2024, suggesting that current short-term challenges are overshadowing the company's positive trajectory this year. The analysts noted that despite DraftKings' slight pullback from its late-2023 highs, its performance remains closely tied to market shares in state-reported handle/GGR. They observed that from October to December, DraftKings saw a reduction in market share compared to competitors like FanDuel and ESPN Bet. However, the analysts see an opportunity in this minor correction. They argue that near-term challenges, such as competitive promotions from ESPN Bet and sports seasonality, are diminishing. This shift allows investors to refocus on DraftKings' fundamental strengths, including robust same-state handle growth, structural hold-rate expansion, disciplined marketing and promotions, and fixed cost efficiencies. These factors, the analysts believe, could lead to potential upside beyond DraftKings' already promising EBITDA guidance.

About NASDAQ: DKNG

D raftKings Inc. operates a digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. The company operates iGaming through its DraftKings brand in 5 states, as well as operates Golden Nugget Online Gaming, an iGaming product and gaming brand in 3 states.

Price: 44.94
Market cap: 21.3 billion USD
Eps: -1.73
P/e ratio: -25.98
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