Jefferies Cuts DraftKings Price Target 8% to $46, Holds Buy Rating
Jefferies trimmed DraftKings’ 2026 price target by 8% to $46 but maintained its buy rating, citing costly product launches and expansion investments. The company posted $136.4 million Q4 2025 net income versus a $135.9 million loss, driven by a 63.8% rise in sportsbook revenue.
1. Jefferies Target Adjustment
Jefferies reduced DraftKings’ 2026 price target by 8% to $46 and reaffirmed its buy rating, citing the company’s conservative outlook that incorporates significant investments in new product development and jurisdiction expansions that will delay revenue contributions.
2. Q4 2025 Earnings Performance
DraftKings recorded $136.4 million in net income for Q4 2025, reversing a $135.9 million loss a year earlier, driven by a 12.3% year-over-year increase in sportsbook volume and a 250 basis-point improvement in hold rates, resulting in 63.8% growth in sportsbook revenue.
3. 2026 Guidance and Costs
Management projects 2026 revenue of $6.5–$6.9 billion, below the $7.29 billion consensus, and expects EBITDA of $700–$900 million, reflecting planned expenditures on new product development and market expansions that will delay immediate revenue impact.
4. Share Performance and Outlook
The share price has fallen roughly 35%–40% year-to-date, but Jefferies anticipates the decline is nearing its end as U.S. sports betting demand continues to grow, with DraftKings positioned as one of the leading operators in the sector.