DraftKings (NASDAQ:DKNG | DKNG Price Prediction) stock is heading into its May 7 earnings report with a fresh price target cut from Citi. Analyst James Hardiman lowered his price target on DraftKings to $29 from $32, while keeping a Buy rating on the shares. The trim raises a fair question: is the sports betting boom losing steam, or is this just a speed bump for one of the sector’s dominant players?
Citi framed its gaming outlook as a “mixed bag,” flagging “signs of life” for the Las Vegas Strip while projecting lighter numbers for regional markets. For DraftKings, a pure-play digital operator, regional softness matters less than sportsbook margin volatility and the cost of expanding into new product lines. That context makes the target cut feel measured rather than alarming.
| Ticker | Company | Firm | Action | Old Rating | New Rating | Old Target | New Target |
|---|---|---|---|---|---|---|---|
| DKNG | DraftKings Inc. | Citi | Price Target Cut | Buy | Buy | $32 | $29 |
The Analyst’s Case
Citi adjusted targets across the gaming space as part of its Q1 preview, raising its price target on Boyd Gaming (NYSE:BYD) shares to $90 from $86 and lifting its target on Caesars Entertainment (NASDAQ:CZR) shares to $30 from $23, both at Neutral. Citi sees more near-term upside in traditional casino operators while maintaining a Buy on DraftKings at a lower target.
The trimmed target likely reflects margin uncertainty that has defined recent quarters. BTIG analyst Clark Lampen also cut his DraftKings Q1 revenue estimate to $1.606 billion from $1.659 billion, citing promotional costs from the Arkansas launch and lower sportsbook handle. That pattern of estimate reductions heading into Q1 suggests Wall Street broadly expects a softer quarter.
Company Snapshot
DraftKings is the only U.S.-based vertically integrated sports betting operator, running mobile sportsbook, iGaming, daily fantasy, and its DraftKings Predictions platform under CFTC oversight. The company is live with mobile sports betting in 26 states and Washington D.C., covering 52% of the U.S. population, with iGaming active in 5 states covering 11% of the population.
Full-year 2025 revenue came in at $6.05 billion, and DraftKings posted its first-ever full-year GAAP net income of $3.71 million. For 2026, management guided for revenue of $6.5 billion to $6.9 billion and adjusted EBITDA of $700 million to $900 million.
Why the Move Matters Now
DKNG stock is down 32% year-to-date heading into earnings, despite strong Q4 results. Shares trade at around $23.42, well below Citi’s new $29 target and significantly below the broader analyst consensus of $35.69. That gap suggests the market is pricing in execution risk beyond a single soft quarter.
Sportsbook margin volatility remains the core concern. The Q1 setup is complicated by sport outcome unpredictability, and last year’s Q1 saw customer-friendly outcomes weigh on margins. Investors navigating high-growth consumer-facing platforms dealing with macro headwinds will recognize this pattern.
What It Means for Your Portfolio
Citi’s maintained Buy rating at $29 tells a nuanced story: the long-term thesis on DraftKings stays intact, but near-term uncertainty justifies a more conservative target. Insiders appear to agree with the long view, with Independent Vice Chairman Harry Sloan purchasing 100,000 shares for $2.18 million in February.
If you believe DraftKings can sustain revenue growth and expand margins through its Predictions platform and iGaming footprint, the current price relative to analyst targets could be compelling. Sport outcome volatility and heavier investment spending could make the Q1 print bumpy, so patience is the watchword here.
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