Truist Securities analyst Barry Jonas has recently expressed his bullish stance on shares of DraftKings Inc., emphasizing the company’s growth potential and expanding market share. According to Jonas, DraftKings has effectively navigated early challenges, paving the way for substantial and sustainable profitability. Consequently, Jonas upgraded his rating on the online-sports-betting stock from hold to buy.

In the second quarter, DraftKings exceeded profit expectations, further solidifying its position in the market. Jonas believes that DraftKings may currently offer the most compelling top-line story in the gaming industry, a sector often tainted by macro concerns.

Training Wheels Off: Unveiling New Opportunities for DraftKings

One notable aspect highlighted by Jonas is the favorable promotional landscape within online sports betting. The industry appears to be adopting a more rational approach sooner than anticipated. Moreover, DraftKings is successfully closing the market-share gap with FanDuel, while benefiting from improved “structural holds” as customers engage with parlays.

Potential Catalyst: Investor Day and Expanded Expectations

DraftKings is set to host an investor day in November, which Jonas identifies as a potential catalyst for the company’s stock. Historically, DraftKings executives have used these events to raise expectations, and Jonas expects a similar outcome this year. He anticipates that DraftKings will revise its view of the U.S. total addressable market to $92 billion from $80 billion. Additionally, upbeat projections on state-level profitability are expected.

Adjusted Price Target Reflects Confidence in DraftKings’ Future

Jonas has raised his price target on DraftKings shares to $44 from $31, representing a nearly 40% increase from Monday’s closing price of $31.63.

Shared Optimism: Analyst Support for DraftKings’ Growth Prospects

Wells Fargo analyst Daniel Politzer has also expressed optimism regarding DraftKings’ potential profitability and has joined the ranks of bullish analysts. With DraftKings shares surging nearly 180% this year, confidence in the company’s future continues to grow.

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