DraftKings Inc. (DKNG) PT Lowered to $48 at Stifel, 'remaining a Stifel select list idea'
Stifel analyst Jeff Stantial lowered the price target on DraftKings Inc. (NASDAQ: DKNG) to $48.00 (from $50.00) while maintaining a Buy rating.
The analyst comments "We initially highlighted a difficult to predict reaction to Thursday's earnings report, with DKNG ultimately selling off -10% in a difficult tape reflecting a combination of 1) concerns around UA/ promo driven FY24E Adj. EBITDA downside, and 2) skepticism towards DraftKings' new gaming tax surcharge. While we acknowledge P&L upside seems to be shifting from user retention/ monetization & hold expansion (Adj. EBITDA accretive day one) to user acquisition (near-term dilutive & difficult to model), we would note the market historically has tended to under-estimate U.S. TAM with little reason to doubt management is holding to target UA payback periods. We share similar hesitation regarding potential consumer backlash to added tax surcharge, though acknowledging rationale vs. more common mitigation strategies. Still, we continue to see a compelling upside bias to out-year estimates, now even further discounted. Hence, we reiterate Buy, with DKNG remaining a Stifel select list idea. TP to $48 (-$2)."