Investing.com - Stifel maintained its Buy rating and $40 price target on DraftKings Inc. (NASDAQ:DKNG) following meetings with the company's Senior Director of Investor Relations at the firm's Annual Jackson Hole Consumer Summit.
The meetings focused on DraftKings' prediction markets and recently announced super app strategy. Management acknowledged near-term logistical hurdles but emphasized long-term advantages including pricing and trading capabilities, marketing scale, vertical product integration, and sports native culture.
Softer December and January handle trends have weighed on the stock, which has declined 45% over the past six months and currently trades at $24.43, roughly 50% below its 52-week high of $48.78. Management attributed the weakness to technical rather than structural factors, pointing to early February state-reported results as evidence. The company noted market share momentum has partially offset market-wide deceleration.
Management indicated a better legislative setup through the remainder of first-half 2026 sessions. Stifel said the market is mispricing the net risk and opportunity of prediction markets. According to InvestingPro analysis, the stock appears undervalued at current levels, with analysts maintaining a Strong Buy consensus.
The firm made no changes to its financial model or price target ahead of DraftKings' super app rollout and guided second-half 2026 user acquisition and downloads ramp.
In other recent news, DraftKings Inc. announced a collaboration with ESPN to introduce account linking between DraftKings Sportsbook and ESPN ahead of the March Madness tournaments. This new feature, Bet Your Bracket, will integrate with ESPN Tournament Challenge, offering personalized betting suggestions. In terms of financial projections, Bernstein SocGen Group raised its price target for DraftKings to $30.00, citing expectations of significant marketing spend driven by the company's predictions product. Benchmark also reiterated a Buy rating with a $53.00 price target, reflecting confidence in the company's market expansion. Additionally, Wells Fargo maintained an Overweight rating with a $30.00 price target, anticipating higher gross margins and strong growth from DraftKings' upcoming All-In-One App. The company has set a 2030 total addressable market range of $55 billion to $80 billion for its casino and sports betting ventures, with an expected EBITDA margin exceeding 30%. Meanwhile, New York online sports betting reported a 68.0% year-over-year revenue increase in Week 9, despite a 10.0% decline in handle. Benchmark also reiterated its Buy rating with a $29.00 price target, highlighting the surge in revenue driven by a higher hold percentage.