DraftKings Inc. PT Lowered to $50 at Stifel
2024.05.29 06:00
(Updated – May 29, 2024 5:53 AM EDT)
Stifel analysts lowered the price target on DraftKings Inc. (NASDAQ:) to $50.00 (from $51.00) while maintaining a Buy rating.
The analysts commented: “Yesterday, the IL senate passed FY25 budget including a revised OSB graduated tax rate system. The proposal now goes to house for concurrence, and is expected to pass with implementation scheduled for 7/1. While an IL tax hike was largely expected by investors, the progressive structure is incremental and disproportionately impacts DraftKings/FanDuel. Even still, our analysis suggests modest impact to DKNG out-year estimates & our DCF methodology, though the news has sparked fears of similar proposals in additional states likely factoring for most of the sell-off witnessed today. While we acknowledge accelerating regulatory headwinds, we believe the initial pullback overstates risk of ‘contagion’ while efforts to raise tax revenues read favorably for potential renewed iCasino expansion momentum. As such, we view T1W weakness as a buying opportunity. We adjust our model to factor the proposed tax revision. Target price moves to $50 (-$1) accordingly. Reiterate Buy.”
