{"id":146505,"date":"2020-08-28T09:44:09","date_gmt":"2020-08-28T16:44:09","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=146505"},"modified":"2020-08-31T11:54:48","modified_gmt":"2020-08-31T18:54:48","slug":"draftkings-penn-national-suffer-downgrades-on-valuation-risk","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/","title":{"rendered":"DraftKings, Penn National Downgraded by Morgan Stanley, Bank Cites Valuation, NFL Risk"},"content":{"rendered":"

In a rarity for sports betting equities these days, not one, but two beloved names suffered downgrades in a single day. Morgan Stanley’s Thomas Allen lowered his ratings on DraftKings (NASDAQ:DKNG) and Penn National Gaming (NASDAQ:PENN) to \u201cequal weight\u201d from \u201coverweight.\u201d<\/p>\n

\"Morgan
The DraftKings Lounge at Gillette Stadium. The stock and rival Penn National sank Friday, as Morgan Stanley downgraded both names. (Image: New York Times<\/em>)<\/figcaption><\/figure>\n

Allen, one of the most widely followed gaming analysts on Wall Street, cites a valuation along with six macro risks that could hinder upside for shares of the companies. Both stocks have rapidly been bid higher this year amid the return of traditional sports, and anticipation that more states<\/a> will embrace legitimate sports wagering. Shares of DraftKings are up 265 percent year-to-date, while Penn National is higher by 115 percent.<\/p>\n

DKNG and PENN have both more than doubled since the start of the year. While we think a lot of the increased value is valid, we are concerned investors\u2019 expectations are too high, and see 6 potential negative catalysts through the end of the year,\u201d<\/strong> said Allen in a note to clients.<\/p><\/blockquote>\n

Even with the downgrades, Allen lifted his price targets on both names, boosting his forecast on DraftKings to $37 from $26 while increasing his Penn estimate to $55 from $49. DraftKings currently trades around $37, while the $55 projection implies a modest upside for Penn.<\/p>\n

Long List of Concerns<\/h2>\n

Noting that investors’ expectations for both companies are \u201ctoo high,\u201d the Morgan Stanley analyst outlines six potential negative catalysts that could weigh on the two stocks.<\/p>\n

\n

Arguably, the big kahuna of the six is a possible cancellation of the 2020 NFL season because of the coronavirus pandemic. DraftKings stock in particular is showing sensitivity to such headlines<\/a>, recently slumping on news of some scrapped Major League Baseball games and headlines indicating the Big 10 and PAC-12 canceled football this year.<\/p>\n<\/div>\n

If the NFL season is shortened or lost outright, that would also be a drag on Penn, because the company is targeting a September debut of its Barstool Sports<\/i> <\/b><\/i>betting app<\/a>, meaning the 2020 football campaign will be a pivotal proving ground for that product. The NFL is intent on playing this year. Football is the most wagered-on sport in the US.<\/p>\n

Allen’s other concerns include reversal of the stay-at-home trend that’s propelling online gaming equities, lower demand due to gamblers losing federal stimulus benefits, increasing industry competition, disappointment on the state legalization front, and, specific to DraftKings, expiration of the lockup period, which could spark a spate of insider selling.<\/p>\n

All About Football<\/h2>\n

The analyst says long-term COVID-19 implications are minimal but adds that \u201cIt is clear from recent volatility that DKNG\/PENN will likely react, depending on whether the NFL season happens or not.\u201d<\/p>\n

Allen also points out that the debut of the aforementioned Barstool <\/i>app is a potential risk for both DraftKings and Penn.<\/p>\n

\u201cFrom [Penn National\u2019s] perspective, we are concerned that the app is not as successful as hoped. From [Draft Kings\u2019] perspective, we are concerned that Barstool is more successful than expected, potentially taking share away,\u201d <\/strong>said the analyst.<\/p>\n

Currently, DraftKings and rival FanDuel combine to control approximately 62 percent of the US online sports wagering market.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a rarity for sports betting equities these days, not one, but two beloved names suffered downgrades in a single day. Morgan Stanley’s Thomas Allen lowered his ratings on DraftKings (NASDAQ:DKNG) and Penn National Gaming (NASDAQ:PENN) to \u201cequal weight\u201d from \u201coverweight.\u201d Allen, one of the most widely followed gaming analysts on Wall Street, cites a […]<\/p>\n","protected":false},"author":46,"featured_media":146509,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[],"acf":[],"yoast_head":"\nDraftKings, Penn National Suffer Downgrades on Valuation Risk<\/title>\n<meta name=\"description\" content=\"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings, Penn National Suffer Downgrades on Valuation Risk\" \/>\n<meta property=\"og:description\" content=\"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2020-08-28T16:44:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-08-31T18:54:48+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2048\" \/>\n\t<meta property=\"og:image:height\" content=\"1365\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/\",\"name\":\"DraftKings, Penn National Suffer Downgrades on Valuation Risk\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg\",\"datePublished\":\"2020-08-28T16:44:09+00:00\",\"dateModified\":\"2020-08-31T18:54:48+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg\",\"width\":2048,\"height\":1365,\"caption\":\"The DraftKings Lounge at Gillette Stadium. The stock and rival Penn National sank Friday as Morgan Stanley downgraded both names. (Image: New York Times)\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"News\",\"item\":\"https:\/\/www.casino.org\/news\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Financial\",\"item\":\"https:\/\/www.casino.org\/news\/financial\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"DraftKings, Penn National Downgraded by Morgan Stanley, Bank Cites Valuation, NFL Risk\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.casino.org\/news\/#website\",\"url\":\"https:\/\/www.casino.org\/news\/\",\"name\":\"Casino.org\",\"description\":\"Latest Casino and Gaming News\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.casino.org\/news\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\",\"name\":\"Todd Shriber\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png\",\"caption\":\"Todd Shriber\"},\"description\":\"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.\",\"sameAs\":[\"https:\/\/muckrack.com\/todd-shriber\",\"https:\/\/www.linkedin.com\/in\/toddshriber\/\",\"https:\/\/x.com\/etfgodfather\"],\"url\":\"https:\/\/www.casino.org\/news\/author\/todd-shriber\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"DraftKings, Penn National Suffer Downgrades on Valuation Risk","description":"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/","og_locale":"en_US","og_type":"article","og_title":"DraftKings, Penn National Suffer Downgrades on Valuation Risk","og_description":"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.","og_url":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/","og_site_name":"Casino.org","article_publisher":"https:\/\/www.facebook.com\/Casino.OrgNews","article_published_time":"2020-08-28T16:44:09+00:00","article_modified_time":"2020-08-31T18:54:48+00:00","og_image":[{"width":2048,"height":1365,"url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg","type":"image\/jpeg"}],"author":"Todd Shriber","twitter_card":"summary_large_image","twitter_creator":"@etfgodfather","twitter_site":"@Casino_Org","twitter_misc":{"Written by":"Todd Shriber","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/","url":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/","name":"DraftKings, Penn National Suffer Downgrades on Valuation Risk","isPartOf":{"@id":"https:\/\/www.casino.org\/news\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage"},"image":{"@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage"},"thumbnailUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg","datePublished":"2020-08-28T16:44:09+00:00","dateModified":"2020-08-31T18:54:48+00:00","author":{"@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85"},"description":"DraftKings and Penn National are downgraded on the same day as Morgan Stanley sees frothy valuation and plenty of macro risk for both names.","breadcrumb":{"@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#primaryimage","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/08\/dkng-1.jpg","width":2048,"height":1365,"caption":"The DraftKings Lounge at Gillette Stadium. The stock and rival Penn National sank Friday as Morgan Stanley downgraded both names. (Image: New York Times)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.casino.org\/news\/draftkings-penn-national-suffer-downgrades-on-valuation-risk\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"News","item":"https:\/\/www.casino.org\/news\/"},{"@type":"ListItem","position":2,"name":"Financial","item":"https:\/\/www.casino.org\/news\/financial\/"},{"@type":"ListItem","position":3,"name":"DraftKings, Penn National Downgraded by Morgan Stanley, Bank Cites Valuation, NFL Risk"}]},{"@type":"WebSite","@id":"https:\/\/www.casino.org\/news\/#website","url":"https:\/\/www.casino.org\/news\/","name":"Casino.org","description":"Latest Casino and Gaming News","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.casino.org\/news\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85","name":"Todd Shriber","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.casino.org\/news\/#\/schema\/person\/image\/","url":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","contentUrl":"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/03\/cropped-11-96x96.png","caption":"Todd Shriber"},"description":"Todd Shriber is a senior news reporter covering gaming financials, casino business, stocks, and mergers and acquisitions for Casino.org. Todd got his start in financial markets as a reporter with Bloomberg News. Later, he became a trader at a Southern California-based long\/short hedge fund, where he specialized in the trading sector and international ETFs leading up to and during the financial crisis. He joined Casino.org in 2019. Currently, Todd analyzes, researches, and writes on ETFs for various web-based publications and financial services firms. Shriber has been featured and quoted in Barron's, CNBC.com, and The Wall Street Journal. His work can also be found on Benzinga, ETF Daily News, ETF Trends, MarketWatch, Fox Business, and Nasdaq.com. He currently resides in Las Vegas, where he enjoys golf and taking his black lab to the dog park. He's also an avid sports fan and likes to wager on college football and the NBA. You can also find him at the three-card poker and roulette table, even though he knows better. Contact Todd at todd.shriber@casino.org.","sameAs":["https:\/\/muckrack.com\/todd-shriber","https:\/\/www.linkedin.com\/in\/toddshriber\/","https:\/\/x.com\/etfgodfather"],"url":"https:\/\/www.casino.org\/news\/author\/todd-shriber\/"}]}},"_links":{"self":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/146505"}],"collection":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/users\/46"}],"replies":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/comments?post=146505"}],"version-history":[{"count":0,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/posts\/146505\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media\/146509"}],"wp:attachment":[{"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/media?parent=146505"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/categories?post=146505"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.casino.org\/news\/wp-json\/wp\/v2\/tags?post=146505"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}