Stifel Reiterates Buy Rating on DraftKings Inc. (DKNG) ahead of Q2 report

Stifel analyst Jeff Stantial reiterated a Buy rating and $50.00 price target on DraftKings Inc. (NASDAQ: DKNG).

The analyst commented: "We highlight DKNG as a top pick heading into Q2 earnings & 2H24. Shares are -15% T2M, driven primarily by the IL tax hike as well as more recently downward 2Q24/2024E Consensus Adj. EBITDA revisions. Looking ahead to the remainder of CY24, legislative session/budget discussion timing suggests likely limited incremental catalysts until CY25 – which we think should enable investor focus to shift back to DKNG’s ongoing FCF inflection. We see well-discussed headwinds to 2Q24/2024E Consensus (IL tax hike; Jackpocket drag) as de-risked following recent revisions, with healthy core growth drivers (evidenced by recent state reported GGR trends) posing potential upside to reset buyside expectations. DKNG’s forthcoming capital allocation update (and likely initial return of capital) should also signal confidence in out-year FCF generation. All-told, we see a compelling setup heading into 2H24, and recommend investors own into DKNG’s Q2 print. We lower our 2024E Adj. EBITDA –1%; TP remains $50."

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 $37.44 yesterday.

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