DraftKings (DKNG) shows the "greatest upside" to Q1 consensus in the broader gaming sector, with further potential for reaccelerating in wagers placed stemming from the upcoming FIFA World Cup, as users move beyond the March Madness tournament, Morgan Stanley said in a Wednesday note.

Morgan Stanley said it expects DraftKings to post a Q1 earnings before interest, taxes, depreciation, and amortization of about $195 million, compared with consensus of $175 million.

For Wynn Resorts (WYNN), Morgan Stanley expects a modest Q1 beat on improving Macau market share and stability among higher-end Vegas properties. While ongoing geopolitical conflict is bound to push out UAE launch date, Morgan Stanley said that the property has not been factored into the shares at all at current levels.

Meanwhile, MGM Resorts (MGM) is expected see an EBITDA miss in Macau in Q1 based on depleting market share, according to the bank.

While a rumored takeover by Caesars Entertainment (CZR) bodes well for its valuation, MGM Resorts owns no real estate and only 50% of its digital business, compared to Caesars owning 50% of its real estate and 100% of its digital business, Morgan Stanley said.

Morgan Stanley reiterated its overweight rating on DraftKings and Wynn Resorts with respective price targets of $40 and $136. The bank maintained its underweight rating on MGM Resorts with a $35 price target.

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