Stifel calls DraftKings ‘a top pick’ heading into earnings

Stifel analyst Jeffrey Stantial highlights DraftKings as “a top pick” heading into Q2 earnings and the second half of the year, noting that shares are down 15% over the past two months, driven primarily by the Illinois tax hike as well as more recent downward consensus adjusted EBITDA revisions. However, legislative session and budget discussion timing suggests incremental catalysts on those fronts are likely limited until calendar year 2025, which the firm thinks should enable investor focus to shift back to DraftKings’ ongoing free cash flow inflection. The firm keeps a Buy rating and $50 price target on DraftKings shares.