{"id":291329,"date":"2023-09-26T15:28:22","date_gmt":"2023-09-26T20:28:22","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=291329"},"modified":"2023-09-27T13:32:51","modified_gmt":"2023-09-27T18:32:51","slug":"draftkings-stock-can-rebound-from-recent-slide-says-analyst","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/","title":{"rendered":"DraftKings Stock Draws JPMorgan Upgrade"},"content":{"rendered":"

Following a slump that dates back to July, DraftKings (NASDAQ: DKNG) stock rallied on Tuesday with the help of bullish commentary from JPMorgan.<\/p>\n

\"DraftKings\"
Employees at DraftKings headquarters, seen above. An analyst says the stock can rebound and offers significant upside potential. (Image: CNBC<\/em>)<\/figcaption><\/figure>\n

In a note to clients today, analyst Joseph Greff upgraded the online sportsbook operator to \u201coverweight\u201d from \u201cneutral\u201d while boosting his price target on the recently downtrodden shares to $37 from $26. That new forecast implies an upside of 35% from the September 25 close and arrived as DraftKings is off 19.31% from its 52-week high<\/a>, printed on August 4.<\/p>\n

We are taking advantage of sluggish share price performance since late July,\u201d wrote Greff. (Sports betting) is an appealing sector, with attractive same-store and new market growth prospects, against the backdrop of an industry-wide improving operating expense control environment.\u201d<\/p><\/blockquote>\n

Greff\u2019s $37 price target on DraftKings, which is slightly above consensus, is based on 15x the operator\u2019s expected 2026 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $1.2 billion and estimated year-end cash of $3 billion in 2026. Current short interest in the stock is 5.4%, high enough that a fresh rally in the shares could compel bearish traders<\/a> to cover those losing bets.<\/p>\n

Catalysts Abound for DraftKings Stock<\/h2>\n

Even with the recent pullback, DraftKings stock has been a 2023 star in the gaming industry, surging 144.29% since the start of the year.<\/p>\n

\n

Catalysts are in place for the shares to rebound and, potentially, reach Greff\u2019s price target. Those sparks include a normalizing cost environment, DraftKings\u2019 own emphasis on better managing expenditures, and a decreasing dependence on new markets to drive top-line growth.<\/p>\n<\/div>\n

\u201cDKNG stands to benefit from a continued increase in market share from higher hold rates (driven by parlay mix and better risk\/ trading) and improved loyalty (from brand recognition, trust, and product enhancements),\u201d added the JPMorgan analyst. \u201cCustomer acquisition costs can continue declining as national scale is achieved and sales\/marketing costs fall precipitously. These translate to better flow-through and rapid EBITDA margin expansion.”<\/p>\n

Though not mentioned by Greff, DraftKings has other revenue-generating avenues that likely aren\u2019t fully appreciated by the investment community yet. Those include DraftKings Marketplace<\/a> and Reignmakers, a fantasy sports game rooted in nonfungible tokens (NFTs).<\/p>\n

DraftKings Establishing a Moat<\/h2>\n

\u201cWide moat\u201d is a phrase frequently bandied about in Corporate America to describe a company\u2019s competitive advantages. Put simply, it highlights a firm\u2019s ability to keep competitors from stealing market share and\/or its ability to retain customers by making switching to a rival unappealing.<\/p>\n

While barriers to entry in the sports wagering industry are relatively low and there are dozens of competitors in the US, the domestic sports betting space is essentially a duopoly controlled by FanDuel and DraftKings.<\/strong><\/p>\n

As noted by Greff, DraftKings has built an enviable moat that’s allowed it to ward off a viable competitor in Caesars Sportsbook. That status is all the more important at a time when Fanatics and Penn Entertainment (NASDAQ: PENN) with ESPN Bet<\/a> are looking to challenge the FanDuel\/DraftKings duopoly.<\/p>\n","protected":false},"excerpt":{"rendered":"

Following a slump that dates back to July, DraftKings (NASDAQ: DKNG) stock rallied on Tuesday with the help of bullish commentary from JPMorgan. In a note to clients today, analyst Joseph Greff upgraded the online sportsbook operator to \u201coverweight\u201d from \u201cneutral\u201d while boosting his price target on the recently downtrodden shares to $37 from $26. […]<\/p>\n","protected":false},"author":46,"featured_media":260470,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,1074],"tags":[81903,80968],"acf":[],"yoast_head":"\nDraftKings Stock Can Rebound From Recent Slide, Says Analyst<\/title>\n<meta name=\"description\" content=\"DraftKings stock can generate big upside, says JPMorgan analyst.\" \/>\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-stock-can-rebound-from-recent-slide-says-analyst\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"DraftKings Stock Can Rebound From Recent Slide, Says Analyst\" \/>\n<meta property=\"og:description\" content=\"DraftKings stock can generate big upside, says JPMorgan analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/\" \/>\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=\"2023-09-26T20:28:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-27T18:32:51+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/DKNG2-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\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-stock-can-rebound-from-recent-slide-says-analyst\/\",\"url\":\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/\",\"name\":\"DraftKings Stock Can Rebound From Recent Slide, Says Analyst\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/DKNG2-scaled.jpg\",\"datePublished\":\"2023-09-26T20:28:22+00:00\",\"dateModified\":\"2023-09-27T18:32:51+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"DraftKings stock can generate big upside, says JPMorgan analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/draftkings-stock-can-rebound-from-recent-slide-says-analyst\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/DKNG2-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2023\/02\/DKNG2-scaled.jpg\",\"width\":2560,\"height\":1707,\"caption\":\"Employees at DraftKings headquarters. 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