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Stifel singled out DraftKings (NASDAQ:DKNG) as a top pick heading into the Q2 earnings season and the second half of the year.
Analyst Jeff Stantial thinks the setup is favorable for a share price recovery from the recent slide, driven primarily by the Illinois tax hike and a wave of downwards adjusted EBITDA revisions from the Street.
“Looking ahead to the remainder of CY24, legislative session/budget discussion timing suggests likely limited incremental catalysts until CY25 — which we think should enable investor focus to shift back to DKNG’s ongoing FCF inflection.”
Stantial and his team think healthy core growth drivers will present upside to help reset expectations, and highlighted the upcoming capital allocation update as another positive. Stifel kept a $50 price target on DraftKings (DKNG).
Shares of DraftKings (DKNG) edged 0.44% higher in premarket trading. The Seeking Alpha Quant Rating on DKNG is flashing Buy.