Bank of America Lowers DraftKings Price Target Amid High Prediction Market Spending
Bank of America analyst Julie Hoover has lowered the price target for DraftKings (DKNG) from $27 to $23, despite maintaining a 'Buy' rating. The downgrade follows disappointing third-quarter earnings where the company reported an adjusted EBITDA loss of nearly $317 million, significantly wider than the anticipated $66 million loss. DraftKings is aggressively investing in its new Predictions division, with expected spending reaching between $650 million and $700 million this year to attract customers through promotional offers. While this expansion aims to create a new revenue stream and increase user engagement—already seeing 1.6 million users in 2026—investors are concerned about the high cost of customer acquisition and regulatory uncertainty surrounding event-based contracts.
Topics: earnings miss EBITDA loss prediction markets price target reduction revenue growth