Jefferies reduced its price target on DraftKings Inc. (NASDAQ: DKNG) to $51.00 from $54.00 while reiterating a Buy rating.

The firm said it had updated its model to reflect weaker third-quarter trends, including lower-than-expected September hold rates and higher promotional spending, which were projected to create a roughly $150 million drag on adjusted EBITDA.

Jefferies noted that the main near-term headwind was pressure from funding growth initiatives rather than any deterioration in the underlying business. The firm added that while earnings timing remained a short-term challenge, the company's long-term profitability potential was intact.