Why DraftKings stock is up 12% this week

stock DraftKings (D.K.N.G. 0.21%) The online betting platform is up 14.2% this week, with several analysts giving positive reviews following its launch in Vermont last week, according to data provided by S&P Global Market Intelligence. This launch marks the 26th U.S. state where DraftKings operates, outside of Ontario, Canada.

Why analysts think DraftKings will perform better

In a note to customers on Thursday: Stiefel Analyst Jeffrey Stantial upgraded DraftKings’ stock to a Hold Buy, raising his price target for the company from $40 to $45 per share. The stock closed Friday’s regular session at $37.62.

Stantial acknowledged increasing competition from sports betting app FanDuel, a subsidiary of the international gambling company. flutter entertainmentand Disney‘s recently launched ESPN Bet app. But he also added that DraftKings’ “near-term headwinds are dissipating (…) healthy same-state growth, structural retention expansion, marketing/promo discipline and fixed cost efficiencies are positively impacting the company’s EBITDA guidance.”

Even on Thursday, UBS Analyst Robin Farley reiterated a Buy rating on DraftKings and set a price target of $44. Farley wrote that DraftKings should be able to maintain a high share of the online sports betting (OSB) market despite the growing threat from competing platforms.

What’s next for DraftKings shareholders?

DraftKings’ current 2024 guidance calls for revenue of $4.5 billion to $4.8 billion (up 25% year-over-year at the midpoint) and adjusted EBITDA of $350 million to $450 million (change from estimates). Adjusted EBITDA loss Between $95 million and $115 million in 2023).

Assuming the timing of DraftKings’ past reports remains consistent, DraftKings is expected to announce fourth-quarter 2023 results and update its 2024 outlook in mid-February. But given the multiple confidence votes on Wall Street in the meantime, it’s not surprising that stocks are bouncing back now.