Morgan Stanley Raises DraftKings’ Price Target to $49, Citing Strong Financial Performance and Positive Outlook

Analyst Upgrade: Morgan Stanley raised DraftKings’ price target to $49 from $40 and maintained a positive rating, considering the company’s good financial performance and ability to generate positive cash flow and earnings.

Operational Success: DraftKings is performing well in day-to-day operations, moving towards profitability, which is a key factor driving the expected rise in its stock.

Revenue and Outlook: Despite lower-than-expected revenue in the fourth quarter, DraftKings is optimistic about its overall earnings for the year, seen as a positive indicator.

Discounted Cash Flow (DCF) Valuation: Morgan Stanley now considers the future value of DraftKings’ cash flows when determining its worth, reflecting the company’s ability to generate positive cash flow.

Jackpocket Acquisition Impact: Analyst adjustments were made after DraftKings acquired Jackpocket for about $750 million, highlighting the impact of strategic moves on predictions.

Future Catalyst: Analyst Stephen Grambling sees a potential positive boost for DraftKings in early March, linked to an upcoming conference by Morgan Stanley focusing on technology, media, and telecommunications.