Folks,

After a strong start to 2023, DKNG just doesn’t seem to want to let up…

The stock was trading at around $11 just 6 months ago, now its inching closer and closer to $30! A big part of the run has to do with the more risk on environment in 2023, allowing for growth stocks to make their comeback. 

That’s not the only thing though…..DraftKings has been receiving particularly favorable coverage amongst analysts since reporting positive Q4 results back in February.

For example, BTIG Research recently called DKNG a top pick for the second half of the year, saying:

“DraftKings (DKNG) is expected to benefit from favorable fundamentals in 2023, including product improvements, an increasing parlay mix, a positive operating backdrop, and improved efficiency, which could drive significant upside in estimates and positive revisions” 

-BTIG

While I don’t necessarily put tons of value on analyst opinions, they can have a powerful impact on investor sentiment. This can be seen in full display if we look at the stock’s most recent rally. On Friday, BTIG had announced DraftKings as a top pick and Oppenheimer had bumped its price target from $30 to $36 on higher user engagement.

The stock then proceeded to have one of its most aggressive rallies of the year on Friday, and continued where it left off today…

It’s important to keep in mind that bullish sentiment based on analyst coverage can have downsides as well. An overly bullish narrative can make DKNG more vulnerable to disappointments, especially if their next earnings results (expected in early August) turn out to be less than stellar.

This may be a good thing for swing traders though, because it makes it more likely for the stock to experience high amounts of volatility, both to the upside and downside.

Until Next Time,