By George Glover

DraftKings stock is on a tough run -- but it might be time for investors to roll the dice on the gambling company, according to JPMorgan.

The Wall Street bank added DraftKings to its analyst focus list on Monday. The list compiles JPMorgan analysts' top ideas aligned with value, growth, income, and short selling investing strategies. Google owner Alphabet, online retailer Amazon.com, IT company Microsoft, and drugmaker Eli Lilly are among the other stocks that feature on J.P. Morgan's analyst focus list, which the bank updates by asking analysts to share their top ideas each month.

At first glance, DraftKings might not make much sense on the list. Its shares have slumped 32% over the past three months, compared with a 6% gain for the S&P 500, with investors fretting about the threat posed by sports events contracts offered by prediction markets like Kalshi and Polymarket.

Traditional online sports betting remains illegal in 19 states, including California and Texas, while events contracts are legal across the U.S. and regulated at the federal level by the Commodity Futures Trading Commission.

JPMorgan analyst Dan Politzer, who rates DraftKings at Overweight with a $42 price target that implies shares can jump 27% from the $33.16 level they traded at as of Friday's close, thinks the stock can mount a comeback.

He noted that DraftKings will this month launch its own prediction-market app, DraftKings Predictions, which ought to be a "positive catalyst" that prevents "cannibalization in online sports betting-legal states from competing prediction market offerings."

Politzer added that Wall Street's earnings before interest, taxes, depreciation and amortization estimates for 2026 look "reasonably set," suggesting there is plenty of room for DraftKings to top expectations. Analysts expect Ebitda of $1.07 billion on revenue of $7.33 billion next year, according to a FactSet poll.

DraftKings CEO Jason Robins said on an earnings call last month that he thinks prediction markets will be a "powerful lever" to pressure states to legalize online sports betting.

Politzer isn't the only analyst who rates the stock highly. Thirty of the 38 analysts who cover DraftKings have it rated at Buy, according to FactSet, with a consensus price target of $44.54.

The addition to the Best Ideas list hasn't helped DraftKings stock on Monday: Shares are down 1.1% at $32.81 at 8:14 a.m. in premarket trading.

Write to George Glover at george.glover@dowjones.com

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December 01, 2025 08:19 ET (13:19 GMT)

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