Two analysts raised the price target for FanDuel parent Flutter among other gaming stock tweaks ahead of earnings season.
Barry Jonas of Truist raised Flutter’s target to $340 while Jeffrey Stantial of Stifel raised his target to $353. Both analysts maintained their buy ratings on the stock.
The FanDuel parent and DraftKings both benefit from hold in May and June that was above their structural hold targets, which should boost adjusted EBITDA by more than $20 million for each, Stantial said.
The strong sports betting months should “silence some fears that sports betting was ‘broken’” after what Jonas called a “brutal” run for NFL and March Madness results.
Online gaming target changes
Jonas updated five targets, maintaining his buy rating on them all:
- Caesars: $38 (-$2)
- DraftKings: $55 (+$5)
- Flutter: $340 (+$60)
- MGM: $50 (+$5)
- Sportradar: $34 (+$1)
Targets for Genius ($14) and Penn ($20) and their buy ratings were unchanged.
Stantial, meanwhile, went the opposite direction on DraftKings:
- DraftKings: $51 (-$2), maintain buy
- Flutter: $353 (+$38), maintain buy
FanDuel, DraftKings estimate changes
Both analysts raised their second quarter EBITDA estimates for both companies.
Jonas expects Flutter to report EBITDA of $873 million (+12% from prior estimate) and DraftKings to report $270 million (+23%). Stantial, meanwhile, expects Flutter to report adjusted EBITDA of $776.7 million (+5%) and $250.7 million (+16%) for DraftKings.
The two firms also agree on estimate swings for 2025 and 2026. Neither dropped their estimates for Flutter given its geographically diversified portfolio, but DraftKings’ estimates were lowered by both based on the recently raised sports betting taxes in multiple states.
More tax increases coming?
Stantial notes that there are still five states with year-round legislative sessions that have considered raising taxes in the past:
- Massachusetts
- Michigan
- North Carolina
- Ohio
- Pennsylvania
Jonas said fallout from the “Big, Beautiful Bill” could have other states looking for more tax revenue from gambling.
“… We think other states who have not considered higher taxes or promo deduction removal could do so before the eventual (inevitable?) step to iGaming, in our view,” he said.
