DKNG Gets a Second Chance After Analyst Sings Its Praises

Short interest is near all-time high levels

Deputy Editor
May 3, 2021 at 10:54 AM
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Cowen and Company handed out a bull note to Draftkings Inc (NASDAQ:DKNG) this morning, lifting its rating on the sports betting concern to "outperform" from "market perform." The analyst cited the growing number of states legalizing sports betting and predicted a "robust" path for DKNG in H2 all the way through 2022. Cowen and Company also added that DKNG's recent pullback from its all-time highs near the $74 level -- notched late in the first quarter of 2021 -- presents a good risk/reward opportunity. The analyst maintained its $70 price target. 

The equity is up 1% at $57.21 this morning in response, taking another stab at overtaking the 100-day moving average, which has kept a lid on the shares during the past several sessions. Higher up, DKNG will have to contend with its 50-day moving average, a formerly supportive trendline that snuffed out its late-April rally. The $56 level looks to have emerged as support on the charts, though, and year-over-year DKNG still boasts a 186.9% lead. 

Cowen and Company is joining a mostly bullish brokerage bunch. Coming into today, 18 analysts called DKNG a "buy" or better, compared to eight "hold" or worse ratings. Plus, the 12-month consensus price target of $73.50 is a 28% premium to current levels. 

Short interest is still on the rise, with volume sitting at just shy of record levels. An unwinding of some of these bearish bets could put more wind at DKNG's back, especially considering the 24.78 million shares sold short make up a solid 7.3% of the stock's available float. 

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