J.P. Morgan analyst Joseph Greff gives DraftKings a $37 price target.
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DraftKings stock should continue to climb as the online sports betting company has an attractive business model that puts it in a strong competitive position, according to one J.P. Morgan analyst.
Joseph Greff upgraded shares of DraftKings (ticker: DKNG) to Overweight from Neutral and established a year-end 2024 price target on the stock to $37, which replaced his year-end 2023 price target of $26.
Greff wrote in a research note Tuesday that he is taking advantage of the stock’s “sluggish” performance since the summer. Shares have declined 15% from July 27 through Monday’s close.
He writes that the gambling industry is currently an appealing sector, “with attractive same-store and new market growth prospects, against the backdrop of an industry-wide improving operating expense control environment.”
“We think DKNG has a strong moat (product, scale, brand) that should allow it to compete against new entrants like PENN’s ESPNBet and Fanatics, much like it competed against Caesars ,
” Greff added.
This upgrade comes after the stock has surged 140% this year. On Aug 4., the company reported fiscal second-quarter revenue of $875 million, which was an 88% increase from the year ago period.
Shares of DraftKings were gaining 3.1% in premarket trading Tuesday to $28.22.
Write to Angela Palumbo at [email protected]