DraftKings’ Stock Soars on Analyst’s Bullish Illinois Take
David L. Ryan/The Boston Globe via Getty Images. Pictured: Entrance to DraftKings’ Boston offices
DraftKings stock soared more than 9% on Tuesday on an analyst’s bullish rating on the company, focusing on the opportunity in Illinois.
“We estimate the Illinois market has a $700M market opportunity and is the fifth largest state in the U.S.,” wrote Benchmark analyst Mike Hickey.
DraftKings shares closed on Tuesday at $39.06. It’s all-time high was $43.70 on June 1. It’s up from a low of $9.84 in March.
With his note, Hickey maintained his buy rating, but pushed his price target to $45 a share.
Hickey pointed out the recent waiver that allows online sign ups at sportsbooks in the state as a reason why revenue would jump. The waiver will last through Sept. 19 and helps out DraftKings, whose mobile skin is through Casino Queen in St. Louis, Ill., which is a five-hour drive from the Chicago metro area.
Hickey said that revenue due to the mobile waiver, assuming an NFL season, would be worth an incremental $5 million to DraftKings, even though it’s estimated that the company would spend $20 million in 2020 to get customers.
DraftKings spent more than $1 million in marketing on Monday night, as it offered new Illinois bettors a chance to bet up to $50 on the Lakers as 81-point underdogs against the Portland Trail Blazers. The Lakers won by 20 and each new bettor that made the bet received up to $45.45 put into their account.
Sports betting in Illinois went live on March 9, right before COVID-19 shut down sports. DraftKings was originally required to wait 18 months to go live in Illinois, but got into the state in August by purchasing Casino Queen.