Morgan Stanley analyst Stephen Grambling initiates coverage on Rush Street Interactive (NYSE: RSI) with a Equalweight rating and a price target of $22.00.

The analyst comments: “RSI is an online casino (iCasino) and online sports betting (OSB) operator that generated ~$1.1bn of revenue in 2025 across 16 US states, Ontario (now in Alberta as well) and three Latin American countries. The company is the most iCasino-centric of the public US operators (we estimate ~80% of US GGR vs. ~1/3rd for DKNG/FanDuel), ranks #4 in the two largest open iCasino states (PA, MI) and is the exclusive operator in Delaware. That mix has translated into revenue growth that has held at 20-30% y/y in North America over the past year while the three largest peers went negative in 2Q26. This was accomplished with the highest EBITDA margin in the group ex-CZR (~14% in 2025 vs. ~10/13% for DKNG/FanDuel) on the lowest marketing intensity (~15% of revenue vs. 19-22%). We expect the growth gap to persist: We forecast a ~25% revenue CAGR and ~40% Adj. EBITDA CAGR in 2025-28e, with margins reaching ~17% by 2028e. With that said, the current stock valuation already prices in best-in-class growth, with RSI trading at ~12x/9.5x 2027e/2028e cons EV/EBITDA against ~7.5x/6.5x for DKNG, FLUT, Entain, Lottomatica, and Super Group (all on consensus estimates). We apply a ~12x NTM multiple (a premium to the peer target multiples we apply of ~10x), leading to ~15% upside to our 12-month PT. In our view RSI looks appropriately valued at current levels, though we acknowledge wide bull-to-bear skew and see better RaRs within our coverage group. As such, it's too early to defend RSI despite the premium, in our view, and we await evidence of new-state share capture or LATAM durability before getting more constructive. We initiate with an Equal-weight rating.”

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Shares of Rush Street Interactive closed at $18.52 yesterday.