Barclays recently upgraded shares of DraftKings, highlighting the company's strong position in the expanding U.S. digital gaming market. The analysts at Barclays raised their rating on DraftKings to Overweight and revised their price target to $50, citing several key factors contributing to their optimism.
Reasons for Optimism
Barclays emphasized the growing market for U.S. digital gaming and praised DraftKings for its significant market share in online sports betting and leading position in iGaming. They also pointed out the potential boost in hold from an increase in parlays, which could drive earnings above consensus in the future.
Favorable Market Conditions
The team at Barclays expressed confidence in DraftKings despite increased competition, viewing the recent pullback in stock price as an attractive entry point for investors. They anticipate additional momentum for DraftKings from new partnerships and acquisitions.
Recent Developments
Earlier this month, DraftKings reported revenue slightly below expectations but raised its outlook for the 2024 fiscal year. Additionally, the company announced its plans to acquire lottery app Jackpocket for $750 million, further bolstering its position in the market. On the other hand, competitor Penn Entertainment reported a wider-than-expected loss per share following the launch of its new sports betting platform.
Market Performance
During early trading, FanDuel owner Flutter Entertainment was down 0.7%, Penn Entertainment dropped 0.5%, and Caesars Entertainment saw a modest increase of 0.2%.
As the digital gaming market continues to evolve, DraftKings appears well-positioned to capitalize on emerging opportunities and drive growth in the sector.
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