BofA Securities Upgrades DraftKings Inc. (DKNG) to Buy, 'accelerating product and revenue momentum are on the cusp of driving an inflection'

BofA Securities analyst Shaun Kelley upgraded DraftKings Inc. (NASDAQ: DKNG) from Neutral to Buy with a price target of $35.00 (from $25.00).

The analyst comments "We upgrade DraftKings (ticker: DKNG) to Buy from Neutral as accelerating product and revenue momentum are on the cusp of driving an inflection in margins and profitability. Why now? While DKNG has outperformed in 2023, we think market share gains can drive both Q2 ‘23 and near-term top line revisions (though likely anticipated) while cost leverage will likely drive bigger revisions in Adj. EBITDA and margins than anticipated. We raise our 2023-2025 est. and PO to $35 (from $25) on 25x 2025E Adj. EBITDA (vs. 3.4x 2024E revenue prior), as we update our valuation methodology. Our new 2025 EBITDA estimate is +17% vs. cons., with another ~15-25% (to $800-$875M) upside possible."

For an analyst ratings summary and ratings history on DraftKings Inc. click here. For more ratings news on DraftKings Inc. click here.

Shares of DraftKings Inc. closed at $28.93 yesterday.

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