DraftKings Falters After JP Morgan Opens Its Coverage With a Glum Assessment
While many analysts and investors appear to have an upbeat attitude toward online sports-betting company DraftKings, Inc. (NASDAQ: DKNG), JP Morgan launched its coverage of the stock with a less enthusiastic analysis and rating. The firm gave DraftKings a neutral rating and set its price target, $48, at the approximate level of the company's current stock market value.
While the analysis did give DraftKings credit for a good platform and first-mover advantage, it then provided a list of reasons why the sportsbook company might not have the major room for expansion other analysts assume. Its research note cites growing competition, the possibility of slowing legalization state to state in the USA, and adds DraftKings' "premium valuation multiple" "may not be sustainable."
Image source: Getty Images.
Source Fool.com
