Mired in a multi-month slump, DraftKings (NASDAQ:DKNG) continues contending with progressively tepid or overtly electronegative commentary from analysts covering the company.

That trend is continuing today as Benchmark analyst Mike Hickey trims his cost butt on the online sportsbook operator to $50 from $70 patch reiterating a “buy” rating on the shares. While that revised price sound projection implies upside of 57.4 percent from the Dec. 1 close, it arrives as DraftKings moult 36.27 percent over the past tense month and with the shares residing 57.57 percent at a lower place the 52-week high.

Hickey notes that the broader securities industry is effectively pricing inward concerns almost the propagate of the omicron variant of the coronavirus and its possible wallop on the sports world. DraftKings became a in public traded keep company inwards Apr 2020 in the midst of the pip shutdown inward US sports history. Thus far, there’s been no more commentary from the major domestic sports leagues regarding a possible hiatus of gambol because of omicron.

Additionally, the psychoanalyst points to the Federal Reserve’s plans for 2022 interestingness rank hikes, which could weigh on unprofitable, high-growth companies such as DraftKings.

Hickey acknowledges that the initial COVID-19 surge shoemaker's last yr lifted DraftKings client engagement and paved the path for regulatory momentum as to a greater extent states rushed to legitimatise sports wagering inwards a adjure to bolster revenue streams.

Gloomy Take on Q4

In more bearish commentary on DraftKings, Roth Washington analyst Edward III Engel notes that luxuriously promotional disbursement is eroding online operators’ fourth-quarter meshwork gaming revenue (NGR),

We trust elevated sportsbook sustain inward November offset printing depression take hold inward October, given to a greater extent favourable sports outcomes, but canalize checks point that promotions remain high,” said Engel. “Unless sports outcomes boost throw once more in December, we assure downside danger to DraftKings’ implied 4Q revenue guidance of $417-457M ($437M midpoint vs Street at $440M).”

The analyst, who previously pondered the opening of a rocky 4th quarter for DraftKings, notes the company’s counselling for the in conclusion leash months of the yr implies year-over-year revenue ontogenesis of 105 percent. But recent NGR data in marquee markets such as Colorado, Michigan, Pennsylvania, and Old Dominion State could misfire that percentage.

Engel initiated reporting of the online sportsbook operator endure month with a “sell” rating and a $41 price target. His damage calculate is pile to $34.

2022 Could Be Tricky for DraftKings

The Philip Milton Roth psychoanalyst sees downside peril to 2022 counselling DraftKings could offer due to the likeliness it testament pin shortsighted of fourth-quarter expectations.

He adds that DraftKings’ 2022 outlook doesn’t include closing the acquisition of Golden Nugget Online Gaming (NASDAQ:GNOG) and new say launches, such as Louisiana, Maryland, and New York. However, Engel’s 2022 DraftKings forecast includes those factors and is simply inward line of merchandise with management estimates.

“DKNG’s ongoing multiple contraction implies Buy-side expectations are moderating. But the accompany has in time to go through a oscillation of downwards approximate revisions,” he adds.