- NASDAQ:DKNG drops 0.51% on Wednesday after gaining 10% to start the week.
- Wall Street Analyst upgrades give Draftkings shares at least a 15% upside from current levels.
- Illinois Governor lifts ban on online customer sign-ups during COVID-19, adding to the bullish case.
NASDAQ:DKNG is a sure bet according to one Wall Street analyst who has set a new price target of $45 for the Massachusetts-based gaming company. Investors went all-in on the upgrade as shares jumped 10% on Tuesday before trading at relatively flat levels on Wednesday. Draftkings now has a market cap of nearly $14 billion which is double that of industry rival Penn National Gaming Inc. (NASDAQ:PENN) and is trading at well above both its 50-day and 200-day moving averages.
The novel coronavirus has had a huge impact on much of Draftkings’ core business as professional sports leagues and casinos have been closed for much of the pandemic. With the lifting of in-person registration by Illinois state governor J.B. Pritzker – the sports betting industry in the Prairie State should experience a substantial increase in online activity. Wall Street Analyst Mike Hickey who provided the $45 price target, also believes that with the opening up of Illinois – the state could be worth upwards of $700 million for Draftkings as one of the only online sportsbooks with its foot in the door.
DraftKings is positioning itself well for the future of online sports betting. At a time where gaming companies are at their lows in terms of daily active users, the firm still had a near 25% year-over-year increase in quarterly revenues. The balance sheet is clean with zero debt and over $1 billion in cash. With the pending NFL season about to get underway in September, DraftKings will need to fend off Penn’s Barstool Sports Betting App that is aiming to take away some of the mobile betting marketspace.