DraftKings Inc. (DKNG) PT Lowered to $60 at Argus, 'leader in daily fantasy sports in the U.S.'
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Argus analyst John Eade lowered the price target on DraftKings Inc. (NASDAQ: DKNG) to $60.00 (from $78.00) while maintaining a Buy rating.
The analyst comments "We are maintaining our BUY rating on DraftKings Inc. (NGS: DKNG). DraftKings is the leader in daily fantasy sports, with approximately 60% of the U.S. market by revenue, according to industry sources. The online gaming industry is in the early stages of growth, with only 4% of gross gaming revenue in the U.S. generated online, compared to 45% in more mature online gaming markets such as the U.K. As more states loosen restrictions, we expect DraftKings to benefit from its market leadership. Investors have recognized the company’s potential, and the shares have outperformed since the company went public in April 2020. Technical patterns are positive as well. But there are risks to owning DKNG shares. Consumer spending patterns may change depending on the course of the pandemic, and regulations may become more onerous. Though we don’t expect DraftKings to post a profit in 2021-2022, we do look for profitability in 2023 and solid growth over the remainder of the decade as the company benefits from economies of scale. We view DKNG as appropriate only for risk-tolerant investors as part of a diversified portfolio. Our revised target price is $60, reduced from $78."
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