DraftKings soars after Morgan Stanley calls a bottom
Jan. 26, 2022 8:01 AM ETDraftKings Inc. (DKNG)By: Clark Schultz, SA News Editor26 Comments
- Morgan Stanley fires off an upgrade on DraftKings (NASDAQ:DKNG) with shares down more than 75% from their highs.
- Analyst Thomas Allen: "While we and the market have been focused on near to medium-term profit concerns, we believe at the current price, one should not ignore that DKNG is a leading market share player in what will be a very large profitable market."
- DKNG trades at roughly 9X the firm's 2025 EBITDA estimate vs. 15X for high-growth Internet stocks.
- Looking ahead at the industry landscape, California could legalize online sports betting this year, which would add $2B to Morgan Stanley's total addressable market forecasts. Launches in Louisiana, Ohio, Maryland and Nebraska are all expected to drive upside as well.
- Shares of DraftKings (DKNG) are up 6.63% premarket to $20.60.
- Read Seeking Alpha author JR Research's breakdown on DraftKings.