DraftKings investors have been waiting for the company to prove that its online betting business can keep expanding while new growth bets start to take shape.
In a Morgan Stanley note shared with TheStreet, analyst Stephen Grambling and his team lowered their DraftKings price target to $39 from $40, while maintaining an Overweight rating on the stock
The new target still implies roughly 60% upside from DraftKings’ May 12 closing price of $24.61. The target cut was modest, and the broader call remains bullish. Morgan Stanley argues that DraftKings appears to be getting little value from investors for prediction markets, future iGaming legalization, and other growth opportunities that could become more important over time.
DraftKings spending weighs on near-term estimates Morgan Stanley adjusted its forecasts after DraftKings’ first-quarter commentary and the company’s latest outlook for prediction-market spending. The bank now expects DraftKings handle growth of about 6% in 2026 and 5% in 2027. It also raised its second-quarter 2026 handle growth forecast to about 8%, helped by better-than-expected April growth and the FIFA World Cup beginning in June.