Analysts lower DraftKings and Flutter price targets ahead of Q3 earnings

Two Wall Street analysts have revised their forecasts for DraftKings and Flutter ahead of the companies’ third-quarter earnings reports, with both expecting higher-than-anticipated losses for DraftKings.

Price target adjustments

Barry Jonas of Truist lowered his price target for DraftKings to $26, down $3, and for Flutter to $100, down $20, while maintaining buy ratings on both companies. Julie Hoover of Bank of America maintained her price targets of $27 for DraftKings and $115 for Flutter, with a buy rating on DraftKings and neutral on Flutter.

Prediction market spending weighs on DraftKings

Both analysts expect DraftKings to announce a larger-than-expected loss in Q3 due to higher spending on prediction markets. Hoover expects an adjusted EBITDA loss of $100 million for Q3 but maintained her $500 million forecast for the full year. Jonas expects an adjusted EBITDA loss of $67 million in Q3 after previously forecasting a $41 million loss.

Jonas lowered his full-year adjusted EBITDA estimate for DraftKings to $598 million from $686 million.

Flutter and FanDuel forecasts

Flutter will report its Q3 earnings on November 4. Jonas maintained his forecast of $5 million in Q3 adjusted EBITDA for Flutter’s U.S. business.

Hoover raised her full-year adjusted EBITDA forecast for FanDuel to $625 million from $585 million previously.