DraftKings Soars Amid Hope Morgan Stanley Upgrade Marks Bottom

DraftKings (NASDAQ:DKNG) ranks as I of Wednesday’s best-performing gaming equities. It rosebush on hopes that an rise from J. P. Morgan Stanley analyst Norman Mattoon Thomas Gracie marks an remainder to a long-running coast for the online sportsbook operator.

In a short letter to clients today, Ethan Allen boosts his DraftKings rating to “overweight” from “equal weight” while maintaining a $31 toll place on the stock. That implies upside of 60 percent from the Jan. 25 close. On the backrest of Allen’s call, DraftKings is higher by almost 12 percent in midday trading on loudness that’s more than three-base hit the day-by-day average. That puts the gunstock on gait for its topper intraday execution since Sept 2020.

While acknowledging DraftKings still isn’t profitable, Gracie Allen points to New York as evidence there’s noneffervescent something to the sports betting investment funds story.

[New York] results on Friday remind us that the US sports betting/iGaming market is likely to live rattling large, with only if a smattering of market apportion winners. We look DKNG to be I of them, and with sentiment at an all-time low-pitched on near-term deprivation concerns, we view at present as a right time to invest for the long term,” said Woody Allen inwards the note.

DraftKings got another elevate with the genus Arizona Department of Gaming reporting November sports betting statistics. The operator has 31.9 percent divvy up of that fast-growing market, putting it before of all its rivals.

For DraftKings, It’s a Start

Allen’s commentary on DraftKings likely comes as a embossment to beleaguered investors inwards the slumping stock.

Entering today, the shares were already downwardly 29.67 percent year-to-date, and almost 72 percent below the 52-week high. Prior to the J. P. Morgan Francis Edgar Stanley call up on the stock, analyst sentiment on DraftKings to get going 2022 was mostly dour. That’s with the shares faltering amid analyst damage aim cuts and as investors produce increasingly fretful virtually the clip line of products to profitability.

Investors also uttered vexation about the broad landscape of sportsbook operators inward the US and the resources required to let out front inward that field. For its part, DraftKings is a liberal disburser on promotions to enticement young clients. However, Allen Stewart Konigsberg notes the militant scene of action already shows signs of thinning, and that’s to DraftKings’ benefit.

“Currently in every commonwealth that releases marketplace portion data, the whirligig 5 operators have at least 82 percent combined share. Though thither is a lot electronegative written almost the levels of marketing and promotional spending, this has goaded a very concentrated market that only players of ordered series tin really vie in,” notes Allen.

Don’t Ignore DraftKings

Profitability remains a ground investor concern. But amid the aforementioned slide, DraftKings inventory may be residing at levels that are too compelling to ignore.

“While we and the market place experience been focused on close to medium-term turn a profit concerns, we believe at the current price, one should non cut that DKNG is a leading marketplace apportion player in what will follow a real large, profitable market,” adds Allen.

If the inventory can establish on today’s momentum, it’s possible shortsighted sellers that beaten-up the carry finally year could follow forced to compensate section of their positions, potentially fanning the flames of a rally.

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