Publish Date: 09/10/2022
Fact checked by: Mike Goodpaster
With the start of the NFL season, the share price of DraftKings has increased 1,7 percent in premarket trade on Friday, building on its 3,9 percent gains on Thursday. The DraftKings stock has increased 7,7 percent over the past five days, a stark difference from the 40 percent drop that occurred this year.
According to the American Gaming Association, many Americans are expected to wager on their favored teams throughout this football season.
Around 47 million people, or 18 percent of all American adults, said they want to wager on the NFL this season. Of those people, 23 million intend to wager online, an 18 percent increase from 2021.
According to Sabrina Escobar of Market Watch, DraftKings may profit from the growing interest in gambling. Truist analyst Barry Jonas said the business polled 27 percent of the online sports betting market in June and July, placing it second only to its rival FanDuel.
Despite the positive industry trends, Jonas kept the stock’s rating at Hold. However, other Wall Street analysts are more enthusiastic about DraftKings at the opening of the NFL season.
Midway through August, Roth Capital Partners raised its rating from Neutral to Buy. At the same time, analysts Edward Engel emphasized DraftKings’ app potential as a strategy for achieving revenue quickly. He also increased his price prediction for the next year from $18 to $25.
“We see a tactical opportunity to own U.S. iGaming stocks ahead of NFL season and upgrade DKNG to buy,” Engel said.
According to Engel, profit is emerging as future marketing, and promotional expenditures decline.
“During 2Q results, FanDuel, Caesars and PENN each demonstrated accelerated paths to profitability,” Engel added.
Due to the NFL season, Engel said that DraftKings’ projection for second-half fiscal year revenue to rise 82 percent over time compared to first-half growth of 45 percent.
Jason Bazinet of Citi increased his price target from $20 to $24 while maintaining a Buy rating.
“We continue to view DKNG as a leading operator in the fast-growing U.S. betting market,” Bazinet said.