Could DraftKings Actually Climb 87%? Or Is Mizuho Totally Wrong?
Mizuho reduced its DraftKings price target to $35 from $45, maintaining an Outperform rating. The new target is 87% above Monday's close, following a 48% drop from January's high. DraftKings increased its 2026 Predictions spending forecast to $650M-$700M and lowered its adjusted EBITDA guidance to $175M-$275M. Mizuho's target is higher than others, with some analysts setting targets as low as $21.
How this was made
The 30-second read
Why it matters
The guidance cut introduces near‑term downside risk, but the retained bullish rating hints at possible upside if the company meets its longer‑term targets.
Market read
Guidance and target changes are material for traders holding or considering DKNG, with potential short‑term pressure but a retained bullish stance.
What to watch
The long‑term 2027 EBITDA outlook and potential cost reductions in Predictions spending could support a rebound.
Background
Mizuho analysts reduced DraftKings' price target and 2026 guidance after the company's third‑quarter report showed higher spending on its Predictions platform and lower EBITDA expectations.
Ticker impact
Mizuho cut DraftKings' price target to $35 and lowered 2026 adjusted EBITDA guidance, providing fresh guidance numbers.
likely downside as the market prices in the lower EBITDA guidance and reduced target
The new target is still above current price, but the cut from $45 to $35 and the EBITDA downgrade signal weaker fundamentals, prompting sellers.
Market effects
The downgrade may weigh on the broader sports‑betting and iGaming sector as analysts reassess growth assumptions.
U.S. market focus; limited regional spillover.
Modest, primarily affecting U.S. tech‑focused investors.
Counterpoint
Mizuho kept an Outperform rating and sees upside potential if 2027 guidance holds, suggesting a buying opportunity on the dip.
Key entities
- companyDraftKings
U.S. sports‑betting and iGaming operator (NASDAQ:DKNG).
- analystMizuho
Equity research firm that issued the price‑target and rating change.
