Morgan Stanley reveals new DraftKings stock price target

Tyler Bundy

Fri, May 15, 2026 astatine 10:07 AM CDT 4 min read

DraftKings investors person been waiting for the institution to beryllium that its online betting concern tin support expanding portion caller maturation bets commencement to instrumentality shape.

In a Morgan Stanley enactment shared with TheStreet, expert Stephen Grambling and his squad lowered their DraftKings terms people to $39 from $40, portion maintaining an Overweight standing connected the stock. The caller people inactive implies astir 60% upside from DraftKings’ May 12 closing terms of $24.61.

The people chopped was modest, and the broader telephone remains bullish. Morgan Stanley argues that DraftKings appears to beryllium getting small worth from investors for prediction markets, aboriginal iGaming legalization, and different maturation opportunities that could go much important implicit time.

DraftKings spending weighs connected near-term estimates

Morgan Stanley adjusted its forecasts aft DraftKings’ first-quarter commentary and the company’s latest outlook for prediction-market spending.

The slope present expects DraftKings grip maturation of astir 6% successful 2026 and 5% successful 2027. It besides raised its second-quarter 2026 grip maturation forecast to astir 8%, helped by better-than-expected April maturation and the FIFA World Cup opening successful June.

The tradeoff is spending. Morgan Stanley expects prediction-market selling concern to beryllium concentrated successful the 2nd and 3rd quarters, with $100 cardinal modeled successful the 2nd 4th and $125 cardinal successful the 3rd quarter. That pushes the firm’s 2026 adjusted EBITDA estimation down to $767 cardinal from $791 million, beneath the midpoint of DraftKings’ guidance range.

Morgan Stanley besides lowered its 2027 adjusted EBITDA estimation to $1.33 cardinal from $1.34 billion. Revenue estimates moved higher, with the steadfast present projecting $6.94 cardinal successful 2026 gross and $8.03 cardinal successful 2027 revenue.

Prediction markets go a cardinal plaything origin

The prediction-market propulsion is 1 of the much absorbing pieces of the DraftKings story, adjacent if it creates near-term unit connected profitability.

In the Morgan Stanley probe note, the steadfast said DraftKings’ prediction markets reached an annualized measurement of astir $1 cardinal successful April, adjacent to astir $83 cardinal of notional volume, without selling oregon promotions. That suggests the merchandise already has immoderate aboriginal traction earlier the institution begins a heavier promotional push.

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