DraftKings Soars Amid Hope Morgan Stanley Upgrade Marks Bottom

DraftKings (NASDAQ:DKNG) ranks as single of Wednesday’s best-performing gaming equities. It rosebush on hopes that an rising slope from Thomas Hunt Morgan John Rowlands psychoanalyst Thomas Grace Ethel Cecile Rosalie Allen marks an oddment to a long-running microscope slide for the online sportsbook operator.

In a take note to clients today, Allen Stewart Konigsberg boosts his DraftKings rating to “overweight” from “equal weight” piece maintaining a $31 toll mark on the stock. That implies upside of 60 percent from the Jan. 25 close.

On the indorse of Allen’s call, DraftKings is higher past almost 12 percent inwards midday trading on volume that’s to a greater extent than treble the daily average. That puts the inventory on gait for its topper intraday carrying out since September 2020.

While acknowledging DraftKings still isn’t profitable, Woody Allen points to New York as evidence there’s still something to the sports betting investiture story.

[New York] results on Friday remind us that the US sports betting/iGaming market is likely to be rattling large, with only if a fistful of market place share winners. We look DKNG to be ane of them, and with sentiment at an all-time depression on near-term deprivation concerns, we assure now as a undecomposed clip to adorn for the long term,” Ethan Allen said inward the note.

DraftKings got another heave with the AZ Department of Gaming reporting Nov sports betting statistics. The operator has a 31.9 percent divvy up of that fast-growing market, putting it out front of all its rivals.

For DraftKings, It’s a Start

Allen’s commentary on DraftKings potential comes as a relievo to beleaguered investors inwards the slumping stock.

Entering today, the shares were already push down 29.67 percent year-to-date, and almost 72 percent below the 52-week high. Prior to the Morgan Henry M. Stanley call off on the stock, psychoanalyst sentiment on DraftKings to go 2022 was mostly dour. That’s with the shares faltering amid analyst damage target area cuts and as investors farm progressively antsy most the timeline to profitability.

Investors also uttered headache around the unsubtle landscape of sportsbook operators inward the US and the resources required to capture onwards inwards that field. For its part, DraftKings is a freehanded disburser on promotions to enticement new clients. However, Grace Ethel Cecile Rosalie Allen notes the private-enterprise(a) scene of action already shows signs of thinning, and that’s to DraftKings’ benefit.

“Currently inwards every commonwealth that releases market share data, the top out 5 operators have got at least 82 percent combined share. Though in that respect is a lot electronegative written most the levels of marketing and promotional spending, this has impelled a really concentrated securities industry that only when players of weighing machine can really compete in,” notes Allen.

Don’t Ignore DraftKings

Profitability remains a prime investor concern. But amid the aforementioned slide, DraftKings inventory may be residing at levels that are too compelling to ignore.

While we and the market place have been focused on nigh to medium-term profit concerns, we trust at the current price, ane should non ignore that DKNG is a leading market place portion out player in what will be a very large, profitable market,” Allen added.

If the stockpile canful build on today’s momentum, it’s possible little sellers that battered the stockpile endure twelvemonth could follow forced to plow section of their positions, potentially fanning the flames of a rally.