Stifel analysts reiterate buy rating on DraftKings stock with $53 target

On Wednesday, Stifel analysts reaffirmed their Buy rating and $53 price target on DraftKings Inc. (NASDAQ: NASDAQ:DKNG), which currently trades at $34.32. The stock has shown significant volatility, trading between $28.69 and $53.61 over the past 52 weeks. This decision follows a series of one-on-one investor meetings with DraftKings' CFO and Investor Relations team during the Stifel Cross Sector Insight Conference. According to InvestingPro , analysts' targets for the stock range from $36 to $74, suggesting potential upside from current levels.

Key points from these discussions highlight several strategic insights for DraftKings. The company is preparing to address a second unexpected tax increase in Illinois, which may lead to more aggressive strategies across the industry. While there are concerns about a slowdown in betting handle, Stifel analysts suggest that the focus should remain on the total addressable market (TAM) momentum, which they believe remains strong. InvestingPro data shows impressive revenue growth of 22.86% over the last twelve months, with analysts forecasting 32% growth for the current fiscal year.

DraftKings management expressed confidence in their odds and modeling, despite some earnings misses related to outcomes. Growth in proposition bets and in-play betting is expected to help mitigate these misses. While the company reported a loss in the last twelve months, InvestingPro analysis indicates expectations for profitability this year, with EPS forecasts of $1.34. Stifel analysts continue to recommend buying DraftKings shares during periods of market weakness, citing structural hold expansion and reduced promotions as factors that could positively impact net gaming revenue.

The analysts also noted a potentially negative legislative catalyst path through the end of June. However, they believe DraftKings could emerge as a market leader in Major League Baseball and other sports outside of the NFL and NBA. Additionally, they observed that DraftKings' iCasino market share is showing signs of acceleration in the second quarter to date.

Overall, Stifel analysts maintain their positive outlook on DraftKings, reaffirming their Buy rating and $53 price target, based on the company's strategic positioning and growth prospects.

In other recent news, DraftKings Inc. reported strong first-quarter results with high user engagement and an improved sportsbook hold. However, the company faced challenges during the March Madness tournament, which saw a high win rate for favorites, affecting revenue growth. Despite this, Benchmark analysts raised their price target for DraftKings shares to $45, maintaining a "Buy" rating. Meanwhile, Citi analysts also reiterated a "Buy" rating despite a new tax in Illinois that could impact DraftKings' earnings. This tax, effective from July 2025, imposes additional fees on wagers, potentially affecting EBITDA by up to $40 million in the second half of the year.

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UBS analysts maintained a "Buy" rating with a $58 target, acknowledging a slowdown in betting handle growth but expressing optimism for long-term growth. They highlighted DraftKings' strategy of enhancing live betting options and parlay offerings to differentiate from competitors. Additionally, Bernstein SocGen Group initiated coverage of DraftKings with an "Outperform" rating, citing potential profitability growth driven by acquisitions like SimpleBet. DraftKings is expected to navigate these developments while exploring strategies to mitigate the impact of new fees and taxes.

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