It’s time for buyers to ditch shares of DraftKings , in line with JPMorgan. Analyst Joseph Greff downgraded shares of the gaming inventory to underweight from impartial, saying in a observe to shoppers that the corporate’s friends supply a clearer path to online-sports-betting (OSM) profitability. “For DKNG, we see a longer runway and more risk to achieving OSB profitability than peers; with the stock’s bounce since earnings, we see 20% downside to our unchanged year-end 2023 price target,” he wrote. Shares shed almost 5% earlier than the bell on the downgrade. Greff highlighted the corporate’s worse-than-anticipated EBITDA steerage among the many causes for the downgrade. For 2023, DraftKings guided for an EBITDA lack of $475 million to $575 million even with the launch of its product in Maryland, Ohio and Massachusetts, which is above the financial institution’s estimate of a $350 million loss. DraftKings’ inventory has come below strain this yr, falling almost 45% for the reason that begin of 2022 and 58.6% from its 52-week highs. The financial institution’s $12 worth goal implies a close to 21% draw back for the inventory from Friday’s shut. JPMorgan additionally downgraded shares of Penn Entertainment to impartial from chubby. The inventory fell 2.3% within the premarket. Penn shares “are within reach of our price target and we see it as possessing less upside than either Las Vegas Strip-centric and LV Locals centric stocks; so we see it as a relative underperformer. In other words, our downgrade of PENN is a valuation call,” JPMorgan mentioned. — CNBC’s Michael Bloom contributed reporting
JPMorgan downgrades DraftKings, says other sports betting stocks look more attractive