DraftKings stock bounces after string of losses, as Oppenheimer analyst sees ‘compelling buying opportunity’

(MarketWatch) – Shares of DraftKings Inc. DKNG, 3.69% surged 3.1% in premarket trading Monday, putting them on track to snap a 5-day losing streak, after Oppenheimer analyst Jed Kelly raised his price target, and said he believes the recent weakness has created “a compelling buying opportunity.”

The stock plunged 23.5% over the past five sessions, after the fantasy sports and online betting site launched a 32 million share offering. Kelly rose his target to $65 from $55, while reiterating his outperform rating. “We believe the raise strengthens [DraftKing’s] position in growing the legalized US sports-wagering/iGaming markets and are expecting the company to leverage its paid-marketing competencies and be aggressive on [customer acquisition costs],” Kelly wrote in a note to clients.

Separately, Benchmark’s Mike Hickey raised his target to $60 from $57, and reiterated his buy rating, saying the online sports betting and iGaming markets have grown more than expected. Hickey said the company has an “exceedingly strong balance sheet,” and is positioned to capture a significant portion of the sports betting and iGaming market.

Meanwhile, Deutsche Bank analyst Carlo Santarelli started coverage of DraftKings with a hold rating and $48 price target. The stock has rocketed 356.3% year to date through Friday, while the S&P 500 SPX, 0.70% has tacked on 7.6%.