DraftKings Inc. (DKNG) PT Lowered to $27 at Susquehanna

Susquehanna analyst Joseph Stauff lowered the price target on DraftKings Inc. (NASDAQ: DKNG) to $27.00 (from $33.00) while maintaining a Positive rating.

The analyst comments "Within a challenging market backdrop where consumer discretionary ETFs are down ~7% YTD, DKNG's (44%) YTD reflects: 1) a 3x+ higher implied-vol of 64 (vs. XLY's 20), which equates to a 3.1 market-implied beta for DKNG vs. XLY; 2) software multiples in transition; and 3) company/ industry-specific headwinds from continued hypercompetition (new competitive entrant like PMs = higher spend to defend = fear of lower TAM and deferred profitability). Without new state launches to offset (only one new per year in each of '25/'26 vs. roughly four per year previously and zero iCasino since 2022) and higher taxes in some legalized states (IL/OH/MD/NJ/LA), the stocks have been engulfed by headwinds, and the unfavorable hold/higher spend in September has created investor dog-piling. While we think 3Q profitability will be lower (we think already discounted), DKNG's PM product launch is catching on, which should help drive strong user KPI momentum, which we think is not factored in the stock. Similar to the 2Q print, we see user KPIs as most important for the stock (KPI strength justifies its PM investment and drives handle growth expectations)."

You May Also Be Interested In

• Trump: just concluded a highly successful discussion with president Vladimir Putin
• Amrize Ltd (AMRZ) PT Lowered to $32 at RBC Capital
• QXO Inc (QXO) PT Lowered to $20 at DA Davidson