DraftKings Favored By Analyst, Even If ESPN Bet Tops Chart: 'Unlikely To Change Industry's Competitive Intensity'
Portfolio Pulse from Chris Katje
DraftKings Inc (NASDAQ:DKNG) maintains a Buy rating and a $50 price target from Needham analyst Bernie McTernan, despite the launch of ESPN Bet by PENN Entertainment (NASDAQ:PENN), which licenses the ESPN brand from The Walt Disney Company (NYSE:DIS). McTernan believes the promotions by ESPN Bet are in line with the industry and unlikely to significantly alter the competitive landscape. DraftKings' market share is not expected to be heavily impacted, and the company is seen as a leader in the North America online gambling market. DraftKings' stock has recently hit a new 52-week high and is up over 250% year-to-date.
November 20, 2023 | 10:10 pm
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NEUTRAL IMPACT
The Walt Disney Company licenses the ESPN brand to PENN Entertainment for ESPN Bet, but the analyst does not see this affecting the competitive intensity in the industry.
Disney's role in this context is limited to licensing the ESPN brand to PENN Entertainment. The analyst's comments suggest that this licensing deal is not expected to have a significant short-term impact on Disney's stock, as the focus is on the competitive dynamics within the sports betting industry.
CONFIDENCE 70
IMPORTANCE 40
RELEVANCE 50
NEUTRAL IMPACT
Flutter Entertainment's FanDuel moved to fourth place from fifth in the sports app rankings, indicating competitive movement but no direct impact mentioned.
The article mentions Flutter Entertainment's FanDuel moving up in the sports app rankings, which reflects the competitive nature of the market. However, there is no direct analysis or commentary on the impact this might have on Flutter Entertainment's stock (PDYPY), leading to a neutral short-term impact assessment.
CONFIDENCE 65
IMPORTANCE 30
RELEVANCE 30
NEUTRAL IMPACT
PENN Entertainment's launch of ESPN Bet, while a potential competitor to DraftKings, is not expected to disrupt the industry's competitive intensity according to the analyst.
Although PENN Entertainment is entering the market with ESPN Bet, the analyst's view that the offer is not overly aggressive and unlikely to change the industry dynamics suggests a neutral short-term impact on PENN's stock. The focus remains on DraftKings' response and market position.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
DraftKings maintains a strong Buy rating and $50 price target from Needham, with confidence in its market position despite new competition from ESPN Bet.
The positive outlook from the analyst suggests confidence in DraftKings' ability to maintain its market share and continue its growth trajectory, even with the introduction of ESPN Bet by PENN Entertainment. The analyst's view that the competitive environment remains benign and DraftKings' recent stock performance could contribute to a positive short-term impact on the stock.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90