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DraftKings Climbs: What Wall Street Is Saying

Sports-gambling company DraftKings was the subject of at least four analyst notes, offering mixed approaches to the stock.

DraftKings  (DKNG) - Get Draftkings, Inc. (DKNG) Report was the subject of a number of analyst notes Monday. The online sports-betting company's busy season is taking off as  the college and professional football seasons are in full swing. 

DraftKings shares were climbing 3.75% to $50.65 premarket Monday. 

Here is what Wall Street is saying about the company. 

Oppenheimer (Outperform Rating Affirmed, PT Raised to $65 From $55)

[Competencies] in product development and customer acquisition that DKNG utilized to become the daily-fantasy-sports market leader will allow the company to be a critical player in accelerating the shift in U.S. sports betting from about $150 billion wagered illegally/offshore to licensed domestic operators. We estimate the U.S. legal sports wagering market growing about 43% annually, reaching about $8 billion by 2025, and $14.4 billion by 2028 as more states regulate sports gaming. [We] expect DKNG to achieve about 25% market share.

- Jed Kelly

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Deutsche Bank (Hold Rating Initiated, $48 PT)

The reality is ... that an investment in DKNG isn't really an investment in the company but more in the concept of sports betting and iCasino and the manifestation of both businesses across the U.S. Simply put, DKNG represents the cleanest way to play this theme. Our hold rating is not a call on valuation because, quite simply, it doesn't matter if it doesn't make sense to us, as this is a pure-play online-gaming company with few truly comparable peers in what we expect will be a fast-growing top-line environment.

- Carlo Santarelli

Needham (Buy Rating, $70 PT Affirmed)

[Online] sports betting and iGaming coming unlocked in new states are a rising tide for the industry, and ... DKNG has clear first-mover, brand and capital advantages. [Customer acquisition cost and online sports betting] profitability will remain persistent debate points. [We] remain confident that the company is acquiring customers with a stringent view of [return on investment and customer lifetime value] while maintaining if not increasing its share in the early markets. Retention remains an open question, but we take DKNG's performance to date in states like NJ (with 14 other competitors) as the best indicator for success.

- Brad Erickson

Credit Suisse (Outperform Rating Initiated, $76 PT)

DraftKings is a leader in the rapidly growing [business-to-consumer] U.S. mobile-sports-betting industry, following the legalization of sports betting in May 2018. While sports betting is still in its infancy, the early signs point to significant growth, and ... post-covid, states are more incentivized than ever to legalize mobile sports betting as they look to balance their budgets following an extended period of financial stress. Similar to the expansion of brick-and-mortar casinos following [2008/2009], ... sports betting will see a similar tailwind, and DKNG is best positioned to benefit from it.

-Benjamin Chaiken