Evercore ISI analyst Kevin Rippey initiated coverage of DraftKings with an Outperform rating and $60 price target. The stock closed Tuesday up 1c to $37.01. The market is underappreciating the “pull forward” in U.S. states’ plans to legalize online sports betting, Rippey tells investors in a research note. The percentage of U.S. citizens with access to online sports gambling is set to increase from 10% currently to more than 40% by the start of the 2022 NFL season, says the analyst. Rippey believes “legislative acceleration” will compound on DraftKings’ technology and customer acquisition cost advantages, leaving shares undervalued relative to the company’s near and long term growth potential. His 2022 revenue estimate is already 25% above consensus, and he sees “material upside if any major toss up states legalize next year.”
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