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Bank of America has upgraded DraftKings to Buy from Neutral, arguing that Wall Street estimates for the online betting operator may be bottoming after a sharp sector selloff.
The call came after DraftKings shares fell 19% over the past month and were trading at $19.53 when the report cited in the source article was published. Bank of America analyst Shaun Kelley kept a $27 price target on the stock.
DraftKings was not alone in the recent decline
The source article described the move as part of a broader repricing across gambling-related equities, not just a DraftKings-specific drop. Over the same one-month period, Flutter Entertainment shares were down 20%, MGM Resorts International was down 26%, and the Roundhill Sports Betting & iGaming ETF had fallen 13%. By comparison, the SPDR S&P 500 ETF Trust was up 0.3%.
That matters because it suggests investor pressure has extended across major U.S. online betting and casino names, even as the exact reasons may vary by company.
Prediction markets remain part of the debate
According to the source article, Kelley said Bank of America had stayed on the sidelines for the past year because of prediction-market risk and material risk to estimates. The note nevertheless characterized prediction markets as “a win-win outcome for DraftKings” and pointed to reduced cannibalization risk.
The article also referenced privately held platforms Kalshi and Polymarket, which allow users to trade contracts on event outcomes. DraftKings, meanwhile, operates its own proprietary prediction-market exchange and has indicated it will continue spending on that product.
Earnings are still a key test ahead
The more cautious part of the story is that DraftKings reported second-quarter 2026 revenue of $1.44 billion, which missed expectations. The source article said the company’s next quarterly results could help show whether estimates have truly bottomed.
For bettors and industry watchers, this is mainly a business signal rather than an immediate product change. The key item to watch is whether future earnings support the more optimistic analyst view while competition questions around prediction markets continue to develop.
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Source: As reported by David Moadel.
