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DraftKings Rallies 5% as BoA Upgrades to Buy With $27 Price Target; Flutter Entertainment Ticks Up

Bank of America spent a year on the sidelines watching DraftKings get hammered by prediction-market rivals, and now it has reversed course with a bold call that sent shares surging while Flutter and MGM barely moved.

By David Moadel
Published October 5, 2026, 8:40am ET · 3 min read

Market Movers desk. Editor: David Moadel.

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A Wall Street firm that spent the past year avoiding DraftKings (NASDAQ:DKNG | DKNG Price Prediction) over prediction-market risk has lifted its view. DraftKings stock is up 5% to $19.46 in morning trading after Bank of America (NYSE:BAC) upgraded the shares to Buy from Neutral.

Also, shares of Flutter Entertainment (NYSE:FLUT) are up 1%, a far smaller gain for the parent of FanDuel, the largest U.S. sportsbook. MGM Resorts (NYSE:MGM) stock is down 0.6%, which points to relief concentrated in DraftKings.

The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is practically unchanged, so the broad market offers no explanation for the move. The Roundhill Sports Betting & iGaming ETF (NYSEARCA:BETZ) is a sector fund covering this group, with DraftKings and Flutter both among its largest holdings; this fund is up 3% to $16.73.

Bank of America Flips on Prediction-Market Risk

Analyst Shaun Kelley of Bank of America upgraded DraftKings stock to Buy from Neutral and kept the firm’s price target on the shares at $27. Kelley wrote that Bank of America had stayed on the sidelines for the past year because of a difficult event path from prediction markets and material risk to estimates.

Bank of America now reads prediction markets as a win-win outcome for DraftKings, sees reduced cannibalization risk, and believes analyst estimates are bottoming. That view extends to DraftKings stock itself, which the firm described as offering a favorable risk-reward setup at its current valuation.

DKNG analyst ratings

Kalshi and Polymarket Weighed on DraftKings

Competition from Kalshi and Polymarket hammered DraftKings shares. These privately held platforms let users trade contracts on event outcomes including sports results, and they drove the stock sharply lower ahead of the upgrade. Uncertainty over how those platforms may be regulated added to the pressure, and DraftKings stock is down 44% year to date.

To compete, DraftKings runs its own prediction-market exchange and has indicated that it will keep spending on that product. On the August 7 earnings call, DraftKings management reported that more than 600,000 customers had engaged with the predictions offering year to date. On the same call, management said the company’s data showed “no discernible impact from prediction markets on our sportsbook revenue.”

Weak Q2 2026 results from DraftKings show why analyst estimates had been falling. DraftKings reported revenue of $1.44 billion, missing expectations, along with adjusted earnings of $0.09 per share that came in below forecasts. The company maintained its full-year revenue guidance of $6.5 billion to $6.9 billion, a steady outlook that supports Bank of America’s case that estimates are bottoming.

DKNG earnings explorer

Flutter and MGM Trail the Rally

Shares of Flutter are only slightly higher, even though the company owns FanDuel, the top U.S. sportsbook and the most direct rival to DraftKings, while MGM stock is in the red, despite the company’s BetMGM joint venture competing in the same sportsbook and online gaming markets. That pattern frames Bank of America’s call as a reset of expectations specific to DraftKings.

However, the bear case holds that an upgrade changes a rating while leaving the competitive field intact, as Kalshi and Polymarket are still taking event-contract volume that DraftKings has to spend to win back, and that outlay can weigh on the company’s margins.

What to Watch Next

A single upgrade after a decline this deep is a sentiment event for DraftKings, and the open question is whether estimates have truly bottomed or merely stopped falling.

DraftKings CEO Jason Robins stated in the company’s Q2 release that “we can win the category this NFL season and beyond,” referring to predictions. The question now is whether NFL-season demand and predictions growth deliver on that confidence.

Contact [email protected] for any questions or corrections.

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David Moadel

David Moadel is financial writer specializing in stocks, ETFs, options, precious metals, and Bitcoin. David has written well over 1,000 articles for leading online publications, helping investors understand markets, income strategies, and risk.His work has appeared in The Motley Fool, InvestorPlace, U.S. News & World Report, TipRanks, ValueWalk, Benzinga, Market Realist, TalkMarkets, Finmasters, 24/7 Wall St., and others.With a master’s degree in education, David has taught at the elementary, high school, and college levels. That teaching background shapes his writing style: clear, educational, and practical. David has also built a loyal social-media audience by providing trustworthy financial content on YouTube, X/Twitter, and StockTwits.

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