Benchmark Co. analyst Mike Hickey reiterated a Buy rating on DraftKings today and set a price target of $50.00.
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Mike Hickey has given his Buy rating due to a combination of factors that highlight DraftKings’ strategic positioning and growth potential. One key reason is DraftKings’ potential acquisition of Railbird Exchange, a federally licensed prediction market platform. This move is seen as a significant opportunity for DraftKings to enter underpenetrated states with high-margin offerings, bypassing state gaming and federal excise taxes, which could enhance their profitability.
Additionally, the regulatory environment appears favorable, with political alignments suggesting strong support for federally regulated prediction markets. This could provide DraftKings with a competitive edge in the long term. Furthermore, the potential expansion into iGaming is viewed as a major growth opportunity, as it represents a higher-margin and lower-volatility business compared to online sports betting. With these strategic initiatives and a revised valuation framework, Hickey has set a price target of $50, reinforcing his Buy recommendation.
In another report released on July 11, Citi also reiterated a Buy rating on the stock with a $58.00 price target.