DraftKings stock price target raised to $64 from $60 at Susquehanna

Investing.com - Susquehanna raised its price target on DraftKings Inc. (NASDAQ:DKNG) to $64 from $60 while maintaining a Positive rating on the stock. The new target represents potential upside from the current price of $45.20, with analyst targets ranging from $39.50 to $78. According to InvestingPro data, the company’s market capitalization stands at $22.4 billion.

The firm cited DraftKings’ significant second-quarter earnings beat, though it noted shares remained relatively flat as investors continue to question whether the company can achieve a sports hold rate in line with structural expectations during the upcoming U.S. sports calendar. The company has shown strong momentum with revenue growing 25.8% over the last twelve months. InvestingPro analysis shows 10+ additional insights about DraftKings’ growth potential and financial health.

Susquehanna believes the market has accepted the concept of reversion-to-mean sports-hold over time for soccer, basketball, and other sports with extensive history, but remains skeptical about NFL-hold rates due to potential temporary mispricing. While currently operating at a loss, InvestingPro data indicates analysts expect DraftKings to achieve profitability this year, with projected earnings per share of $1.35 for FY2025.

The firm identified several factors that could reduce NFL sports-hold volatility, including promotional efficiencies in a relatively stable competitive landscape and partial recycling of favorable customer outcomes into iCasino, which has shown growth acceleration correlated with favorable sports betting results.

Susquehanna views prediction markets as a net opportunity for bookmakers, creating new high-yield databases in states where online sports betting is not yet legal while potentially creating legislative urgency for large non-OSB states like California, Texas, Georgia, South Carolina, and Minnesota.

In other recent news, DraftKings Inc. reported strong second-quarter earnings with revenue reaching $1,513 million, marking a 37% increase year-over-year. This performance surpassed both Guggenheim’s estimate of $1,388 million and the consensus forecast of $1,424 million. As a result, Goldman Sachs raised its price target for DraftKings to $61, citing the company’s impressive Q2 revenue and adjusted EBITDA results. Jefferies also increased its price target for DraftKings to $54, maintaining a Buy rating due to the stronger-than-expected quarterly results and consistent fiscal year 2025 guidance. Needham reiterated its Buy rating with a $60 price target, maintaining a positive outlook despite challenges such as higher taxes and market launches. Meanwhile, Guggenheim reiterated its Buy rating and set a $60 price target, reflecting confidence in DraftKings’ performance. In related developments, MoffettNathanson raised Flutter Entertainment’s price target to $350, maintaining a Buy rating and highlighting potential upside in U.S. EBITDA estimates. These developments underscore the positive sentiment among analysts regarding DraftKings and Flutter Entertainment.

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