(ticker: DKNG) were down 1.6% Wednesday to $20.34 and the S&P 500 fell 1%. The stock has fallen 26% in 2022.
Engel highlighted the app’s growth potential and possibility for profitability as reasons for the upgrade.
“We see a tactical opportunity to own U.S. iGaming stocks ahead of NFL season,” Engel wrote in a research note Wednesday. “iGaming stocks have historically outperformed between midsummer and the start of NFL season, when the sports calendar swings from trough to peak.”
NFL’s regular season kicks off Sept. 8 with a matchup between the Buffalo Bills and the Los Angeles Rams.
(PENN) showed they were moving faster toward profitability with their second-quarter results.
Though other operators aren’t expecting positive Ebitda, or earnings before interest, taxes, depreciation and amortization, until the second half of 2023, “we see investors owning the group as certain operators prove that profitability in this industry is at least achievable,” Engel wrote.
Today, about 35% of the U.S. population live in 30 states where online sports betting is legal and that percentage will increase to 45% next year when digital wagering should become legal in five more states.
Even though the crush of states legalizing online gaming is over, Engel said a slower pace could be good for the near term because of accelerated medium-term Ebitda growth, where customer acquisition costs also will slow.
Earlier this month, DraftKings lifted its financial forecast and CEO Jason Robins said “customer engagement remains strong, and we continue to see no perceivable impact from broader macroeconomic pressures.”
Engel boosted his price targets of two other online betting platforms—
DraftKings Is a Buy Ahead of NFL Season, Analyst Says
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DraftKings lifted its forecast earlier this month.
Angus Mordant/Bloomberg
Sports betting app
DraftKings
is a stock that investors should own heading into pro football’s regular season, Roth Capital Partners says.
Analyst Edward Engel upgraded his rating to Buy from Neutral and raised his 12-month price target to $25 from $18.
Shares of
DraftKings
(ticker: DKNG) were down 1.6% Wednesday to $20.34 and the S&P 500 fell 1%. The stock has fallen 26% in 2022.
Engel highlighted the app’s growth potential and possibility for profitability as reasons for the upgrade.
“We see a tactical opportunity to own U.S. iGaming stocks ahead of NFL season,” Engel wrote in a research note Wednesday. “iGaming stocks have historically outperformed between midsummer and the start of NFL season, when the sports calendar swings from trough to peak.”
NFL’s regular season kicks off Sept. 8 with a matchup between the Buffalo Bills and the Los Angeles Rams.
Engel added that sports betting platforms such as
Caesars Entertainment
(CZR) and
PENN Entertainment
(PENN) showed they were moving faster toward profitability with their second-quarter results.
Though other operators aren’t expecting positive Ebitda, or earnings before interest, taxes, depreciation and amortization, until the second half of 2023, “we see investors owning the group as certain operators prove that profitability in this industry is at least achievable,” Engel wrote.
Today, about 35% of the U.S. population live in 30 states where online sports betting is legal and that percentage will increase to 45% next year when digital wagering should become legal in five more states.
Even though the crush of states legalizing online gaming is over, Engel said a slower pace could be good for the near term because of accelerated medium-term Ebitda growth, where customer acquisition costs also will slow.
Earlier this month, DraftKings lifted its financial forecast and CEO Jason Robins said “customer engagement remains strong, and we continue to see no perceivable impact from broader macroeconomic pressures.”
Engel boosted his price targets of two other online betting platforms—
PENN Entertainment
to $40 from $36 and
Rush Street Interactive
(RSI) to $11 from $10.
Write to Angela Palumbo at [email protected]
Source: https://www.barrons.com/articles/draftkings-buy-online-betting-51660754018?siteid=yhoof2&yptr=yahoo