Why DraftKings (DKNG) Stock Is Up Today

What Happened?

Shares of fantasy sports and betting company DraftKings (NASDAQ:DKNG) jumped 4.2% in the afternoon session after Wells Fargo upgraded the stock's rating to "Overweight" from "Equal-Weight" and substantially increased its price target. 

The bank's analyst boosted the price target to $49.00 from a previous $31.00, signaling strong confidence in the company's future prospects. This move suggested a potential 58% upside from the previous target. Adding to the positive sentiment, reports indicated that lawmakers in Georgia planned to introduce a bill to legalize sports betting. The proposal, if passed, would permit up to 18 online sportsbooks in the state, potentially opening a significant new market for companies like DraftKings.

After the initial pop the shares cooled down to $35.76, up 4.2% from previous close.

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What Is The Market Telling Us

DraftKings’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 23 days ago when the stock dropped 2.8% on the news that Truist Securities lowered its price target on the stock due to costs associated with the launch of its new prediction app. 

The investment firm cut its price target on DraftKings to $43.00 from $45.00, though it kept a Buy rating. The change followed the sports betting company's rollout of its prediction app across 38 states. Truist also reduced its future earnings forecasts for 2026 and 2027, citing the costs of the app launch and other business initiatives. Adding to the pressure, DraftKings' main competitor, FanDuel, launched a similar prediction app, signaling increased competition in the new market.

DraftKings is flat since the beginning of the year, and at $35.76 per share, it is trading 33.1% below its 52-week high of $53.49 from February 2025. Investors who bought $1,000 worth of DraftKings’s shares 5 years ago would now be looking at an investment worth $665.90.

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