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DraftKings Jumps as Citi Rates it a Buy

·1 min read

By Dhirendra Tripathi

Investing.com – DraftKings stock (NASDAQ:DKNG) rose 4% Monday after Citi (NYSE:C) initiated coverage of the stock with a buy rating and a $66 target.

The target translates into an upside of around 32% on the stock from its current level, based on the analyst’s belief that the company will remain a market leader in the online sports betting and gaming business.

Jason Bazinet thinks the opportunities offer investors exposure to "robust, long-term growth". According to Bazinet, DraftKings should be a net beneficiary as customer acquisition rationalizes and the market consolidates. He also believes current Street expectations for payer growth to be reasonable.

Bazinet is however not optimistic about DraftKings going ahead with its pursuit of U.K.’s Entain (LON:ENT).

As per DraftKings’ revised offer, after the U.K. firm rejected its first approach, the American betting firm is offering 2,800 pence for each Entain share comprising 630 pence in cash and the balance payable in new DraftKings shares.

The latest offer amounts to over 16 billion pounds ($22 billion), more than four times Entain’s 2020 revenue.

Entain has given DraftKings time till 5:00 PM of October 19 to make a firm offer or say it does not intend to do so.

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