Analyst: DraftKings Could Have Over 50% Rise
Credit Suisse announced this morning that it is starting analyst coverage of sports betting companies DraftKings (NASDAQ: DKNG) for the first time, according to a report from Seeking Alpha. The bank’s research note said, “We are initiating the DraftKings hedge with an outperformance rating and a target price of $ 76,” an increase of over 55% from Friday’s closing price of 48.82 $.
The research note then identifies four factors as the basis for Credit Suisse’s outperforming bullish call. These include the structure of the US sports betting business, in which features such as limited licenses “are expected to lead to higher than expected market share,” and the tendency of COVID-19 to push Revenue-hungry states speed up the legalization of the online sports betting business.
Other factors cited by the Zurich investment bank include “the evolution of in-game betting that benefits margins and volumes” and “DraftKings’ unique customer acquisition strategy and marketing relationships.”
Credit Suisse isn’t the only analyst to give DraftKings a boost on Monday morning. Brad Erickson, analyst at Needham, also launched the stock’s hedge this morning, although its $ 70 price is forecasting a more moderate rise of 43%. According to Bloomberg and Investing Info Daily reports, Erickson describes DraftKings as one of the “biggest beneficiaries of the take-off of online sports betting and gambling in the United States.” . “
Credit Suisse and Needham are outliers in the general analyst consensus on DraftKings. Many investors and analysts were relatively unimpressed overall by the results of the sportsbook. overview of third quarter results, published as part of its recent action prospectus. According to the Olympia report, DraftKings’ consensus price target among 22 analysts is $ 51.81, about the same as its current price.
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