Analysts: Sports Betting Stock Reactions From Earnings To Date

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There may be a clear-cut winner of third quarter earnings season, even with more sports betting stock calls to hear before the period ends.

DraftKings saw a 16.5% pop Friday after announcing improved 2023 guidance and profitable 2024 guidance. CEO Jason Robins presented the earnings report DraftKings stockholders wanted to see for years and analysts responded in kind, with positive target improvements on updated estimates.

Analysts also gave their insights on Penn Entertainment, Bally Bet parent Bally’s and Sportradar.

Sports betting stock movement post earnings

The momentum did not stop there for DraftKings. It is now at $34.81, up 20.1% through Thursday’s close from November 2.

DraftKings is not the only sports betting stock winner through Thursday’s close when looking at post-earnings growth compared to the closing price before earnings were announced:

Bullish on profitable DKNG sports betting

Carlo Santarelli of Deutsche Bank, Jeffery Stantial of Stifel, and Barry Jonas of Truist wrote positively about DraftKings, while noting there could still be more catalysts to come at investor day next Tuesday.

Jonas maintained his buy rating and raised his target to $45 with his new estimates toward the top of DraftKings’ new guidance. While there might be some conservatism built into the numbers because of ESPN Bet and other improving operators, Jonas expects “many players” to return to DraftKings after trialing other options.

Stantial kept his hold rating while raising his target to $36. Stantial noted there may be room for a third and even fourth material online sports betting operator in the US, but added only real product innovation will likely take share from DraftKings and FanDuel.

Santarelli also maintained his hold rating while raising his target to $31. Despite the upcoming investor day, Santarelli said how shares react from now on will be “entirely predicated on DKNG’s ability to execute.”

Time to buy PENN stock?

Santarelli reaffirmed his catalyst call buy following Penn Entertainment‘s third quarter results, saying the stock has a “fairly favorable near term catalyst stack” including the launch of ESPN Bet next Tuesday and an investor day in Q1.

Based on valuation, though, Santarelli maintained his hold rating while his target fell to $28 on new estimates. EBITDA losses from interactive were larger than expected but retail casinos beat his expectations, he added.

Steven Wieczynski of Stifel kept his hold rating while his target fell to $25. The retail business is likely oversold, Wieczynski said, but more clarity on ESPN Bet’s market share is preferred before revising his rating.

Jonas left his hold rating and $25 target unchanged. Penn will speak at an upcoming Truist conference in December after ESPN Bet has been up and running for three weeks of football.

Sports losses only part of BALY slump

Targets fell for Bally’s with estimates lowered for multiple reasons. One is continued losses from North American Interactive.

Stantial dropped his target to $8.50 while maintaining his hold rating. The continued “timing drift” on profitability means investors will likely need to see proof before buying into Bally Bet and online casino.

Santarelli’s target fell 40% to $9 while he maintained his hold rating. A positive for the stock at this point would be the return of investor appreciation of US iGaming.

Sports betting supplier stock stays buy

Steven Pizzella of Deutsche Bank maintained his buy rating on Sportradar and moved his target to $12 based on 2025 estimates.

The buy rating is based on a reasonable valuation, a strong balance sheet and its 18% two-year adjusted EBITDA compound annual growth rate, Pizzella said. Sportradar announced 38% adjusted EBITDA growth for the third quarter.

Downside risks include the prices for data and streaming rights inflating as competition increases and rapid sports betting consolidation in the US which would lead to fewer operators.