TLDR
- Bernstein cut its DraftKings price target from $32 to $28, citing weak near-term growth visibility after a soft guidance reset
- JP Morgan also lowered its price target from $41 to $32, though both firms kept positive ratings (Outperform/Overweight)
- Multiple analysts have cut price targets in recent weeks, with reductions ranging from 12% to 22%
- DraftKings beat Q4 EPS estimates ($0.25 vs $0.18 forecast) with revenue of $1.99B, up 43% year-over-year
- March 2 investor presentation is seen as a key catalyst, where management is expected to outline its prediction markets strategy
DraftKings is having a rough February. A string of analyst price target cuts has piled pressure on the stock, which is now down nearly 60% from its 52-week high of $53.61, trading around $22.35.
On February 17, Bernstein SocGen Group cut its price target on DKNG from $32 to $28, while keeping an Outperform rating. The firm pointed to weak near-term growth visibility following the company’s recent guidance update.
Bernstein analyst Ian Moore said the guidance “left something to be desired” for investors looking for clearer near-term return signals.
Also on February 17, JP Morgan analyst Daniel Politzer maintained an Overweight rating but slashed his price target from $41 to $32 — a 22% reduction.
The cuts don’t stop there. Bank of America lowered its target from $37.50 to $30, Benchmark went from $37 to $29, and BTIG dropped from $45 to $37, all on February 13.
Canaccord Genuity has now cut its target twice in quick succession — first from $54 to $50 on February 3, then from $50 to $44 on February 13, while holding a Buy rating each time.
Despite the wave of downgrades, the average price target across 35 analysts still sits at $39.89, implying roughly 78% upside from current levels. The consensus rating from 38 firms stands at 1.9 out of 5 — solidly in “Outperform” territory.
Q4 Earnings Beat Wasn’t Enough
DraftKings did deliver a strong Q4. EPS came in at $0.25, well above the $0.18 consensus. Revenue hit $1.99 billion, just ahead of the $1.98 billion estimate, representing 43% year-over-year growth.
The company also benefited from $50 million in favorable hold outcomes, partly due to negative NFL results in Q4 2024 providing a low comparison base.
But the market wasn’t impressed. Despite the beat, DKNG stock fell in pre-market trading following the earnings release, as guidance for 2026 disappointed investors.
Prediction Markets in Focus
A key sticking point is prediction markets. DraftKings has discussed potential 2026 growth spending in this area but left prediction market revenue out of its official guidance entirely.
Bernstein’s Moore views prediction markets as a real growth opportunity for online sports betting operators, and says the burden is now on management to lay out a clear path at the March 2 investor presentation.
That event is shaping up to be a pivotal moment for the stock. Investors will be watching closely for concrete revenue targets and a defined strategy around what DraftKings itself calls a new “predictive event platform.”
Guggenheim, meanwhile, kept a Buy rating but trimmed its target from $42 to $37, citing its own 2026 outlook concerns.
InvestingPro’s Fair Value model currently flags DKNG as undervalued, and GuruFocus estimates a one-year GF Value of $62.46 — more than double the current trading price.
The stock last traded around $22.35, with a current average analyst target of $39.89.
