Morgan Stanley analyst Stephen Grambling maintained a Buy rating on DraftKings (DKNG – Research Report) yesterday and set a price target of $53.00.
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Stephen Grambling has given his Buy rating due to a combination of factors that highlight DraftKings’ strong growth potential and strategic positioning in the market. The management’s confidence in the long-term growth of the online sports betting industry, despite concerns about decelerating handle growth, is a key factor. They attribute the slower growth to a shift in bet types and previous heavy promotions, but expect positive growth moving forward.
Additionally, DraftKings’ focus on increasing structural hold through single-game parlays and live betting is expected to reduce volatility and enhance profitability. The re-acceleration of the iGaming segment, following strategic investments, further supports the company’s growth outlook. Moreover, DraftKings is exploring the prediction market opportunity, which could attract a new customer cohort and provide additional growth avenues in the future.
According to TipRanks, Grambling is a 4-star analyst with an average return of 5.4% and a 60.83% success rate. Grambling covers the Consumer Cyclical sector, focusing on stocks such as DraftKings, Marriott International, and Boyd Gaming.
In another report released on May 13, Benchmark Co. also maintained a Buy rating on the stock with a $45.00 price target.