What Happened?
Shares of fantasy sports and betting company DraftKings (NASDAQ:DKNG)
jumped 2.8% in the morning session after Bank of America upgraded the stock from Hold to Buy with a $27 price target. According to TipRanks, Bank of America analysts Julie Hoover and Shaun Kelley kept that $27 target, which they said implies about 37% upside.
Measured by the amount wagered, they found prediction markets such as Kalshi and Polymarket growing more slowly than traditional sportsbooks, and they said core sportsbook customers still prefer the sportsbook experience. That led them to call prediction markets a “win-win” and to note that DraftKings has reclaimed the lead in active users. “The King is back on offense,” the note said. DraftKings is also trying to add up to 3 million new users this year.
After the initial pop, the shares cooled down to $19.94, up 2.2% from the previous close.
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What Is The Market Telling Us
DraftKings’s shares are very volatile and have had 28 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock gained 4.2% on the news that BofA Securities upgraded the stock from Neutral to Buy while maintaining a $27 price target, StreetInsider reported. BofA Securities analyst Shaun Kelley stated that prediction markets represent a win-win scenario, observing that cannibalization risks are lower. Kelley also pointed out that consensus earnings estimates appear to be bottoming out. Furthermore, the analyst noted that the equity's 47% retreat over the previous year creates an attractive risk-reward profile for investors. The upgrade matters because it signals that Wall Street's negative revision cycle may finally be concluding, bolstering market confidence after an extended valuation compression.
DraftKings is down 44.1% since the beginning of the year, and at $19.94 per share, it is trading 45% below its 52-week high of $36.24 from January 2026. Investors who bought $1,000 worth of DraftKings’s shares 5 years ago would now be looking at only $406.94.
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