Bank of America Upgrades DraftKings (NASDAQ:DKNG) to Buy

Key Points

• Bank of America upgraded DraftKings from “neutral” to “buy” and set a $27 price target, implying 45.24% upside from the prior close.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $34.04, despite several brokerages recently trimming their targets.
• DraftKings beat quarterly EPS expectations ($0.09 versus $0.02) but missed revenue estimates, reporting $1.44 billion in revenue, down 4.6% year over year, while the stock opened at $18.59 near its 12-month low.

DraftKings (NASDAQ:DKNG - Get Free Report) was upgraded by analysts at Bank of America from a "neutral" rating to a "buy" rating in a report released on Monday, Marketbeat reports. The brokerage currently has a $27.00 target price on the stock. Bank of America's price objective would indicate a potential upside of 45.24% from the company's previous close.

A number of other brokerages also recently commented on DKNG. Barclays lowered their target price on DraftKings from $35.00 to $34.00 and set an "overweight" rating on the stock in a research note on Monday, August 10th. Benchmark increased their target price on shares of DraftKings from $29.00 to $30.00 and gave the stock a "buy" rating in a research report on Friday, August 7th. Truist Financial set a $29.00 target price on DraftKings in a report on Monday, August 10th. Moffett Nathanson reduced their price target on DraftKings from $27.00 to $25.00 in a research report on Wednesday, July 15th. Finally, JPMorgan Chase & Co. decreased their price target on DraftKings from $34.00 to $33.00 and set an "overweight" rating for the company in a research note on Monday, August 10th. One equities research analyst has rated the stock with a Strong Buy rating, thirty-one have issued a Buy rating, seven have given a Hold rating and two have given a Sell rating to the company. According to data from MarketBeat, DraftKings has an average rating of "Moderate Buy" and a consensus price target of $34.04.

DraftKings Price Performance

DKNG opened at $18.59 on Monday. The firm has a market capitalization of $9.23 billion, a P/E ratio of -48.92, a PEG ratio of 1.87 and a beta of 1.61. The stock has a fifty day moving average of $23.57 and a 200-day moving average of $24.24. The company has a quick ratio of 1.02, a current ratio of 1.02 and a debt-to-equity ratio of 3.22. DraftKings has a 12-month low of $18.52 and a 12-month high of $36.98.

DraftKings (NASDAQ:DKNG - Get Free Report) last issued its quarterly earnings results on Friday, August 7th. The company reported $0.09 earnings per share for the quarter, beating analysts' consensus estimates of $0.02 by $0.07. The business had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.51 billion. DraftKings had a negative return on equity of 11.26% and a negative net margin of 2.68%.DraftKings's revenue for the quarter was down 4.6% compared to the same quarter last year. During the same quarter in the previous year, the company posted $0.30 earnings per share. Equities analysts forecast that DraftKings will post 0.4 EPS for the current fiscal year.

Insider Transactions at DraftKings

In related news, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction dated Wednesday, August 19th. The shares were sold at an average price of $24.05, for a total transaction of $258,753.95. Following the completion of the transaction, the director directly owned 1,881 shares of the company's stock, valued at $45,238.05. This trade represents a 85.12% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 47.18% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On DraftKings

Institutional investors have recently made changes to their positions in the stock. Renaissance Technologies LLC acquired a new stake in shares of DraftKings in the first quarter valued at approximately $17,660,000. Spruce House Investment Management LLC increased its holdings in shares of DraftKings by 129.6% during the first quarter. Spruce House Investment Management LLC now owns 9,650,000 shares of the company's stock worth $208,633,000 after purchasing an additional 5,446,166 shares during the period. Janus Henderson Group PLC raised its holdings in DraftKings by 9.3% in the 1st quarter. Janus Henderson Group PLC now owns 27,665,699 shares of the company's stock valued at $588,288,000 after acquiring an additional 2,351,790 shares in the last quarter. Aurora Investment Counsel bought a new stake in DraftKings during the fourth quarter worth about $2,157,000. Finally, Capital World Investors increased its stake in DraftKings by 181.4% in the fourth quarter. Capital World Investors now owns 18,626,429 shares of the company's stock valued at $641,867,000 after acquiring an additional 12,008,357 shares during the last quarter. 37.70% of the stock is owned by institutional investors and hedge funds.

DraftKings Company Profile

DraftKings Inc is a digital sports entertainment and gaming company that provides online sports betting, daily fantasy sports and internet-based casino gaming. Its products are delivered through mobile applications and websites, allowing customers to wager on professional and collegiate sports, participate in fantasy contests and play a range of casino games where permitted by law.

The company also offers sports and betting-related content through DraftKings Network and operates additional gaming and entertainment products, including online lottery services in select markets.

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