Analyst: DraftKings Stock Could Win the Market Share

Options traders are responding to the analyst's note

Deputy Editor
Jan 26, 2022 at 11:01 AM
facebook twitter linkedin

Morgan Stanley upgraded Draftkings Inc (NASDAQ:DKNG) to "overweight" from "in-line" this morning. The analyst foresees the sports betting company as one of the few winners to emerge from a large gambling and gaming market in the U.S. In response, DraftKings stock was last seen 9.3% higher to trade at $21.11.

This isn't the only analyst action DKNG has seen this week, as Moffett Nathanson yesterday slashed its price target to $13 from $23. Both firms are joining a split brokerage bunch, with nine of 18 calling the stock a "strong buy," while the remaining nine say "hold" or worse. Meanwhile, the 12-month consensus price target of $53.81 is a massive 151.5% premium to current levels. 

Options traders are on the move after the bull note. Already, 46,000 calls and 25,000 puts have exchanged hands, which is triple the intraday average. The most popular contract, the weekly 1/28 22-strike call, is seeing new positions being sold to open.

Pacing for its best single-day percentage gain since September 2020, DraftKings stock is back to trading above the $21 level, which it fell below to touch a nearly two-year low of $20.77 on Jan. 24. This means the security has some ground to cover in order to recoup its 23% year-to-date losses, not to mention its 60% deficit in the last 12 months.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners