DKNG)? Since peaking at $43.7 at the start of June, the share price has pulled back by 22% to its current value of $34.68 per share.” data-reactid=”12″>Is lady luck turning its back on online sports betting player DraftKings (DKNG)? Since peaking at $43.7 at the start of June, the share price has pulled back by 22% to its current value of $34.68 per share.
It hasn’t helped that COVID-19 has made it difficult to predict the short-term fate of live sports action. The good news is that after two major college football conferences voted to postpone their fall seasons, others have indicated they will move ahead with own leagues. However, besides the uncertainty concerning sports’ leagues’ resumption, DraftKings has now been confronted with an altogether different kind of headwind. And possibly a costly one, too.
Bernie McTernan believes the concerns are “overblown.” Echoing DraftKings’ management’s belief that they do not expect a change to taxation rules, McTernan argues that even if the rules do change, at the most draconian extreme they “would have a 3.2% cumulative impact on his price target.”” data-reactid=”14″>The IRS plans to impose an excise tax on daily fantasy sports betting. Upon hearing the news, investors got cold feet, sending DKNG shares tumbling. However, Rosenblatt analyst Bernie McTernan believes the concerns are “overblown.” Echoing DraftKings’ management’s belief that they do not expect a change to taxation rules, McTernan argues that even if the rules do change, at the most draconian extreme they “would have a 3.2% cumulative impact on his price target.”
“While headlines on college football and the potential for an excise tax on DFS have been pressuring the stock, we do not see either significantly impacting the long-term opportunity in front of DKNG. We are focused on the strong underlying revenue trends in the business and expected growth acceleration in 2H20E driven by a resurgence in OSB. We forecast ~$700M of revenue in ’21E, although we see upside from continued momentum in iGaming and OSB launches in TN and VA,” McTernan opined.
click here)” data-reactid=”20″>As far as McTernan is concerned, DKNG remains “a top pick in Consumer Tech” and, as such, he reiterates a Buy rating on the stock along with a $60 price target. Should McTernan’s thesis play out, investors could be pocketing a hefty 73% gains over the next 12 months. (To watch Ellis’s track record, click here)
See DKNG stock analysis on TipRanks)” data-reactid=”21″>The rest of the Street backs up McTernan’s call. Barring 1 Hold rating, all 10 remaining analysts who have posted a DKNG review over the last 3 months, rate the stock a Buy. At $47.09, the analysts forecast upside of 36% in the year ahead. (See DKNG stock analysis on TipRanks)
Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.” data-reactid=”30″>To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
View Article Origin Here
