Truist says DraftKings (DKNG) last night announced it will reverse course and not implement its recently announced online sports betting surcharges after other competitors stated they wouldn’t follow its lead, and immediately after market leader Flutter’s (FLUT) FanDuel said the same. The reversal should remove some uncertainty around execution risks, but also raises the question of how DraftKings can offset the impact or if guidance needs to be tweaked, the analyst tells investors in a research note. The firm thinks the recent DraftKings stock underperformance may reflect a more bearish view around surcharge risks which now appear not applicable. It keeps a Buy rating on the shares with a $50 price target.
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