Bank of America noted that sports outcomes in the third and fourth quarters raise concerns about volatility and long-term earnings.
- BMO Capital lowered the firm’s price target on DraftKings to $63 from $65 and maintained an ‘Outperform’ rating.
- BMO Capital stated that prediction markets, the NBA betting scandals, and unfavorable sports outcomes present near-term overhangs; however, the long-term opportunity for the company remains essentially unchanged.
- Bank of America noted that sports outcomes in the third and fourth quarters raise concerns about volatility and long-term earnings.
DraftKings (DKNG) stock became one of the top trending tickers on Stocktwits, and the company’s shares fell over 5% in early trading following Bank of America’s downgrade of the stock to a ‘Neutral’ rating amid “relentless headwinds.”
Bank of America analyst Shaun Kelley cut the price target on DraftKings to $35 from $48, according to TheFly. The analyst noted that sports outcomes in the third and fourth quarters raise concerns about volatility and long-term earnings.
BMO Capital also lowered the firm’s price target on DraftKings to $63 from $65 and maintained an ‘Outperform’ rating. The firm noted that prediction markets, the NBA betting scandals, and unfavorable sports outcomes present near-term overhangs, but the long-term opportunity for the company remains essentially unchanged.
The analyst said that DraftKings has underperformed in iGaming and 2026 could once again bring state-level tax headwinds. Kelley added that the prediction markets present a challenging near-term narrative.
Wall Street View
BMO Capital lowered the firm’s price target on DraftKings to $63 from $65 and maintained an ‘Outperform’ rating. The firm noted that prediction markets, the NBA betting scandals, and unfavorable sports outcomes present near-term overhangs, but the long-term opportunity for the company remains essentially unchanged.
On Monday, Bernstein analyst Ian Moore lowered the firm’s price target on DraftKings to $50 from $55 and kept an ‘Outperform’ rating. The firm noted that, as if Kalshi and Polymarket were not enough, DraftKings and Flutter Entertainment (FLUT) have been under pressure in recent weeks as state data has begun to paint a challenging picture for early fourth-quarter win margin.
Prediction Market Competition
DraftKings and Flutter Entertainment are facing disruption from prediction markets such as Kalshi and Polymarket, which have been able to offer users better odds with deeper order books, according to Edwin Dorsey.
The news surrounding investments in Kalshi and Polymarket had put pressure on shares of DraftKings and Flutter in recent weeks, with Wall Street analysts also noting it as a buying opportunity.
Retail sentiment on DraftKings remained unchanged in the ‘bullish’ territory, compared with message volumes at ‘high’ levels, according to data from Stocktwits.
Shares of DraftKings have declined by over 22% this year.
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