FMP
DraftKings Added to Morgan Stanley's Top Picks, Shares Rise
Jun 10, 2024 5:22 PM - Davit Kirakosyan
Image credit: FMP
DraftKings (NASDAQ:DKNG) shares rose more than 2% intra-day today after Morgan Stanley added the stock to its Top Picks list, despite Illinois recently adopting a higher, progressive tax structure. The investment bank contends that tax hikes do not automatically translate to identical impacts across all markets and should not be considered inevitable.
Morgan Stanley noted that not all states face budget shortfalls, so higher taxes should not be universally expected. They also emphasize that increased taxes may not be directly comparable since operators often reduce their investments, marketing efforts, and promotions in response.
The bank highlights that in states needing to address budget deficits, the expansion of legalized gaming could present opportunities, such as online sports betting in California and Texas, or iGaming in Maryland, New York, and Illinois. The analysts believe concerns over taxes are exaggerated and that positive earnings will serve as a significant catalyst.
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