DraftKings (NASDAQ:DKNG) Cut to “Equal Weight” at Wells Fargo & Company

Wells Fargo & Company lowered shares of DraftKings (NASDAQ:DKNG) from an overweight rating to an equal weight rating in a research note issued to investors on Monday morning, MarketBeat reports. The firm currently has $21.00 price objective on the stock, down from their prior price objective of $30.00.

A number of other equities analysts also recently issued reports on DKNG. UBS Group downgraded DraftKings from a “buy” rating to a “neutral” rating and dropped their price target for the stock from $48.00 to $22.00 in a research report on Monday. Benchmark raised their price target on DraftKings from $29.00 to $30.00 and gave the company a “buy” rating in a research note on Friday, August 7th. JPMorgan Chase & Co. downgraded DraftKings from an “overweight” rating to a “neutral” rating and decreased their price objective for the company from $30.00 to $21.00 in a report on Monday. Needham & Company LLC lowered their price objective on shares of DraftKings from $30.00 to $25.00 and set a “buy” rating for the company in a research note on Monday. Finally, Sanford C. Bernstein dropped their target price on shares of DraftKings from $27.00 to $22.00 and set an “outperform” rating on the stock in a report on Monday. One investment analyst has rated the stock with a Strong Buy rating, twenty-five have assigned a Buy rating, ten have given a Hold rating and three have issued a Sell rating to the company. Based on data from MarketBeat.com, the stock currently has an average rating of “Moderate Buy” and an average target price of $27.61.

DraftKings Stock Performance

Shares of NASDAQ:DKNG opened at $19.64 on Monday. The firm’s 50 day simple moving average is $21.20 and its 200-day simple moving average is $23.88. The company has a debt-to-equity ratio of 12.21, a quick ratio of 1.02 and a current ratio of 0.99. DraftKings has a one year low of $16.55 and a one year high of $36.98. The firm has a market cap of $9.79 billion, a PE ratio of -24.55, a price-to-earnings-growth ratio of 2.54 and a beta of 1.65.

DraftKings (NASDAQ:DKNG) last announced its quarterly earnings results on Thursday, November 5th. The company reported ($0.53) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.41) by ($0.12). DraftKings had a negative net margin of 5.91% and a negative return on equity of 43.92%. The firm had revenue of $1.33 billion during the quarter, compared to analysts’ expectations of $1.39 billion. During the same quarter in the previous year, the firm posted ($0.26) EPS. The firm’s revenue for the quarter was up 16.2% on a year-over-year basis. As a group, equities analysts predict that DraftKings will post 0.31 EPS for the current year.

Insider Buying and Selling

In other news, CFO Alan Ellingson bought 18,908 shares of the stock in a transaction on Monday, November 9th. The stock was bought at an average cost of $18.51 per share, for a total transaction of $349,987.08. Following the completion of the purchase, the chief financial officer directly owned 214,692 shares in the company, valued at approximately $3,973,948.92. The trade was a 9.66% increase in their ownership of the stock. The acquisition was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Director Jocelyn Moore sold 10,759 shares of DraftKings stock in a transaction on Wednesday, August 19th. The stock was sold at an average price of $24.05, for a total transaction of $258,753.95. Following the completion of the transaction, the director directly owned 1,881 shares in the company, valued at $45,238.05. This represents a 85.12% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 47.18% of the company’s stock.

Institutional Trading of DraftKings

A number of institutional investors have recently made changes to their positions in the business. Kornitzer Capital Management Inc. KS increased its position in DraftKings by 0.4% during the 3rd quarter. Kornitzer Capital Management Inc. KS now owns 176,620 shares of the company’s stock valued at $3,356,000 after buying an additional 691 shares in the last quarter. Integrity Advisory Solutions LLC boosted its holdings in DraftKings by 8.2% in the third quarter. Integrity Advisory Solutions LLC now owns 10,571 shares of the company’s stock worth $201,000 after acquiring an additional 803 shares in the last quarter. CoreCap Advisors LLC boosted its holdings in DraftKings by 336.5% in the second quarter. CoreCap Advisors LLC now owns 1,148 shares of the company’s stock worth $29,000 after acquiring an additional 885 shares in the last quarter. Englebert Financial Advisers LLC grew its stake in shares of DraftKings by 1.3% during the third quarter. Englebert Financial Advisers LLC now owns 68,237 shares of the company’s stock worth $1,297,000 after acquiring an additional 897 shares during the last quarter. Finally, Envestnet Portfolio Solutions Inc. grew its stake in shares of DraftKings by 9.0% during the second quarter. Envestnet Portfolio Solutions Inc. now owns 13,744 shares of the company’s stock worth $347,000 after acquiring an additional 1,139 shares during the last quarter. Institutional investors and hedge funds own 37.70% of the company’s stock.

Key DraftKings News

These are some of the DKNG news items that stood out recently:

• Positive Sentiment: CFO Alan Ellingson bought 18,908 shares for about $350,000, increasing his holdings by 9.66%. The purchase may signal confidence in the business, although it does not address concerns about profitability or the outlook. Insider purchase report
• Negative Sentiment: Several firms cut DraftKings’ ratings or price targets after its latest results and outlook reset. JPMorgan lowered its rating, while Bernstein, Barclays, TD Cowen, Truist, BTIG and Canaccord issued target cuts or more cautious forecasts, signaling diminished confidence in near-term earnings prospects. JPMorgan rating change
• Negative Sentiment: The main concern is the expense and uncertain economics of DraftKings’ Predictions business. An investigation by Levi & Korsinsky questions whether SEC filings adequately disclosed the investment’s costs before the company cited a $650 million to $700 million commitment. The inquiry is an allegation, not a finding of wrongdoing. Levi & Korsinsky investigation notice

About DraftKings

DraftKings Inc. is a digital sports and entertainment company founded in 2012. It began as a daily fantasy sports platform and has since expanded into online sports betting and gaming. The company offers daily fantasy contests, a sportsbook and online casino products, including games such as slots and table games. Its services are available in a range of U.S. jurisdictions and in Ontario, Canada, where permitted by local regulations. DraftKings is headquartered in Boston, Massachusetts. Co-founder Jason Robins serves as the company’s chief executive officer.