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DraftKings Jumps - Needham Initiates at Wall Street High Target

Sports-gambling company DraftKings was initiated buy at Needham with a Wall Street high price target of $70 a share.

DraftKings  (DKNG) - Get Draftkings, Inc. (DKNG) Report shares jumped Thursday after Needham initiated the sports-gambling company with a buy rating and Wall Street high price target of $70 a share. 

The Boston company is "one of the leading beneficiaries as online sports betting and gambling take off in the U.S. - an opportunity we size between $42 [billion] and $58 billion annually longer term," said Needham analyst Brad Erickson. 

Online sports betting has taken off in the U.S. after the Supreme Court struck down a 1992 federal law banning sports betting at the federal level. A number of states have enacted sports-betting legislation.

"We expect the regulatory tailwind to persist and believe online providers' access to data creates a structurally better user experience vs. brick and mortar," Erickson said. 

For DraftKings specifically, Needham's analyst sees its "datacentric approach to customer acquisition" as a catalyst that will help the company "regularly exceed top-line forecasts."

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DraftKings shares have more than quintupled so far in 2020. They are trading at six times their 52-week low below $10, set late last October. At last check they were 3.4% higher at $60.82.

Separately on Thursday, the NFL's Philadelphia Eagles unveiled a multiyear deal with DraftKings that makes the company the team's official sports-betting partner. 

Check out the reports from the Philadelphia Eagles Mavens, Kracz and McMullen.

In the deal DraftKings will receive naming rights to a field club at the Eagles' stadium, Lincoln Financial Field. 

DraftKings' branding will also be placed on Eagles social-media channels, practice livestreams, in-game branding, videoboards and signage at Lincoln Financial Field. 

Terms of the agreement weren't disclosed.