Truist reiterates Buy on DraftKings stock despite guidance cut
Truist Securities maintained a Buy rating and $26.00 price target on DraftKings (DKNG) despite its Q3 earnings miss. The company reported adjusted EBITDA of -$317M, below estimates, and cut 2026 EBITDA guidance to $175M-$275M. DraftKings also issued initial 2027 guidance, expecting EBITDA of $800M-$1B, below analyst expectations. The stock trades at $23.52, with a consensus Buy rating.
How this was made
The 30-second read
Why it matters
The stark guidance cut outweighs the Buy rating, likely prompting a price decline toward the $26 target.
Market read
DraftKings' earnings miss and guidance cut are the primary market‑moving event; analyst coverage adds context but does not change the negative outlook.
What to watch
Potential upcoming regulatory changes or new partnership announcements could offset the guidance miss.
Background
Truist reiterated a Buy rating with a $26 price target despite the earnings miss, indicating some analysts still see upside.
Ticker impact
DraftKings reported Q3 earnings miss and sharply cut FY2026 EBITDA guidance, a fresh primary disclosure.
downward pressure as investors price in lower EBITDA outlook and higher marketing spend
The guidance reduction from $700‑900M to $175‑275M is material and unprecedented, prompting immediate re‑valuation.
Market effects
The sports‑betting sector may see broader valuation pressure as peers are compared to DraftKings' guidance cut.
U.S. online gambling stocks could face short‑term weakness.
Limited to U.S. equity markets; no immediate global macro effect.
Counterpoint
If the marketing spend drives long‑term user acquisition, the short‑term dip could be a buying opportunity.
Key entities
- analystTruist Securities
Issued the reiterated Buy rating and $26 price target.
- analystStifel
Also reiterated a Buy rating with a $32 price target.
