Citi analyst Steven Sheeckutz maintained a Buy rating on DraftKings (DKNG – Research Report) yesterday and set a price target of $58.00.
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Steven Sheeckutz’s rating is based on several key considerations. One of the primary reasons for the Buy rating is the improvement in DraftKings’ hold rate on a year-over-year basis, which has been observed consistently in recent months. This suggests a positive trend in the company’s ability to retain a higher percentage of bets, which is crucial for profitability.
Additionally, despite the potential headwinds from state tax hikes and the delayed Missouri OSB launch, the company’s revenue guidance for 2025 remains robust, aligning with both Citi and consensus estimates. Although the adjusted EBITDA forecast is at the lower end of the guidance range, the stability in online sports betting market share and the potential for future product expansion, such as prediction markets, provide a solid foundation for growth. These factors, combined with recent market multiple expansion, justify the slight increase in the target price from $55 to $58.
In another report released on June 23, J.P. Morgan also initiated coverage with a Buy rating on the stock with a $50.00 price target.
DKNG’s price has also changed moderately for the past six months – from $37.100 to $42.890, which is a 15.61% increase.