DraftKings initiated with a Hold at Texas Capital

Texas Capital initiated coverage of DraftKings (DKNG) with a Hold rating and $39 price target While the firm says it normally would view buying a “blue chip” online gaming stock, such as DraftKings, on its recent valuation dip as a buying opportunity, it sees outsized stock volatility in the relative near-term given the company’s pure-play nature combined with recent prediction market expansion, current investor skepticism on hold and win-rate and possible online gaming tax increases in a few states, adding that the firm is “Neutral but not negative.”