What happened
Shares of DraftKings (DKNG 0.93%) were running 4.6% higher in afternoon trading Friday, while the broad market index was flat after an analyst at Oppenheimer raised his price target on the fantasy-sports and sports-betting leader.
So what
DraftKings is already one of the top sportsbooks in the country alongside Flutter Entertainment's FanDuel. Oppenheimer analyst Jed Kelly sees DraftKings generating over $1 billion in revenue in 2021, which would be a near doubling of its fiscal 2020 performance.
Image source: DraftKings.
In November, the sportsbook raised its current year revenue outlook to a range of $540 to $560 million and introduced projections for 2021 of $750 million to $850 million. Kelly believes a review of state-betting results indicates DraftKings will raise its guidance for the coming year when it reports earnings on Feb. 26.
Now what
Because Virginia and Michigan introduced sports betting last month, the analyst told investors in a research note he believes DraftKings online casino gambling market-share gains will help push the company to raise guidance, particularly if January trends continue to hold.
As a result, Kelly raised his price target on DraftKings from $60 per share, where it's currently trading, to $80 per share, a 33% increase. The sportsbook went public in April 2020 at a price of $52 per share via a reverse merger with a special purpose acquisition company (SPAC) instead of a traditional initial public offering (IPO).
