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DraftKings Stock Gains After Citigroup Initiates Coverage With 'Buy' Rating

Citigroup analyst Jason Bazinet initiated coverage of DraftKings with a 'buy' rating and a $66 price target for the Boston-based sports betting group.

DraftKings  (DKNG) - Get Free Report shares bumped higher Monday after analysts at Citigroup initiated coverage of the sports betting group with a 'buy' rating, citing the strength of the group's position in a maturing market.

Citigroup analyst Jason Bazinet, who kicked-off coverage of the group with a $66 price target, said the Boston-based group offers investors exposure "robust, long-term" growth in the sports gaming market, adding that it's well-placed to capitalize on market consolidation and user expansion.

DrafKings shares were marked 3.75% higher in late-morning trading Monday to change hands at $49.69 each, a move that would nudge the stock's year-to-date gain to around 5.5%.

Last month, DraftKings improved its bid for British gaming giant Entain, which operates the Coral and Ladbrokes betting shops in the U.K. market, to around $22.4 billion, in a move that faces potential opposition from rival MGM Resorts International  (MGM) - Get Free Report.

A takeover of Entain, which boasts a global network of online and retail gaming operations across 18 countries and five continents, would be a 'transformational' deal for Boston-based DraftKings, said Benchmark analyst Mike Hickey, citing the breadth of its operations and the value of its estimated $5.27 billion in 2021 revenues.

It could also see DraftKings challenge U.K. betting stalwart 888, which agreed to buy the non-U.S. assets of bookmaker William Hill from Caesars Entertainment CZR for around $3 billion.

However, MGM has said it's the "exclusive partner in the U.S. online sports betting and iGaming market", through its BetMGM joint-venture, adding that "any transaction whereby Entain or its affiliates would own a competing business in the U.S. would require MGM's consent."