DraftKings cut at JPMorgan as shares slide in response to Penn-ESPN deal
DraftKings Inc (NASDAQ:DKNG) was raised to neutral from Underweight at JPMorgan (NYSE:JPM) on Wednesday, maintaining a $26 price target on the stock.
The firm told investors in a note that they are moving their rating on the stock to Neutral following the PENN Entertainment Inc (NASDAQ:PENN) and ESPN deal.
DKNG shares are down more than 9% at the time of writing.
«Given where current after-market levels are ($29+, down ~10% from its closing price), we are using this price weakness to up our rating to Neutral from Underweight,» the firm explained.
«Shares of DKNG are down in response to PENN-ESPN's agreement tonight, which is causing a negative reaction on (presumably) increased competition and promotional pressure (which we see as a reasonable interpretation),» it added.
The firm concluded that the deal has «the potential to disrupt what has been an increasingly more rational OSB/iCasino environment.»
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