Sports betting giant DraftKings has been singled out as the top online gambling stock to own for the upcoming NFL season by Macquarie Capital’s senior gaming analyst Chad Beynon.
As the football season kicks off on Sept. 5, Beynon said the Boston-based company is well-positioned to capitalize on favorable NFL game outcomes, higher structural hold, and growth momentum in the online sports betting and iGaming sectors.
DraftKings shares closed at $35.33 on Tuesday, with Macquarie setting a target price of $50. “We see DKNG best positioned for near-term upside,” Beynon wrote in an Aug. 26 research note, as per Las Vegas Review-Journal, pointing to potential gains in the second half of the year due to current growth trends and recalibrated 2024 guidance.
Despite underperforming its peers in 2024, Beynon sees opportunities for DraftKings to exceed expectations, driven by a stronger fourth-quarter outlook. The company holds a $17 billion market capitalization, while its main competitor, FanDuel, has a market cap of $22.8 billion under parent company Flutter Entertainment.
DraftKings and FanDuel together control roughly 70% of the U.S. online sports betting market and more than 60% of reported internet gambling revenue.
DraftKings reported its first profitable quarter as a publicly traded company in Q2 2024. However, the company nearly lost momentum after announcing plans to introduce a customer surcharge on winning bets in high-tax states, a proposal that was later scrapped due to widespread backlash.
In addition to DraftKings, Macquarie also identified MGM Resorts International and Caesars Entertainment as stocks to watch. MGM, which has a market cap of $11.8 billion, is trading at $38 per share, with Macquarie setting a target price of $55. The firm’s recent initiative to offer a single digital wallet across all states where BetMGM operates could provide a “material boost,” according to the research note.
Caesars Entertainment, with a market cap of $7.9 billion, is also projected to outperform, with Macquarie setting a target price of $52. Caesars shares closed at $37.80 on Tuesday.
Original article: https://www.yogonet.com/international/noticias/2024/08/28/76842-draftkings-named-top-pick-by-macquarie-analyst-ahead-of-nfl-season
