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American multinational investment bank Morgan Stanley has singled out DraftKings as the top pick in the US sports betting/iGaming sector after seeing the stock drop 70% from its 52-week high.

Analyst Thomas Allen said: “While we agree that short-term losses will be considerable (still with a 2022 EBITDA despite recent guidance), we believe the market is very short-sighted and our profitability growth by state suggests that profitability at long term is much higher than anticipated”.

“Public actions show that sports betting/iGaming is a profitable business, while past precedents show that actions that can transition from revenue stories to profit stories have a significant upside.”

Allen and his team believe DraftKings will outperform revenue this year, further reinforcing the significant total approachable market opportunity.

Morgan Stanley has an overweight rating over DraftKings and a target price of $31. The bookmaker’s shares rose 2.21% to $24.04.

DraftKings is looking for new opportunities this week, with an investor event to be held on Friday.

About DraftKings

DraftKings Inc. is a digital sports and entertainment company created to fuel the competitive spirit of sports fans with products that span everyday fantasy games, regulated games and digital media.

Based in Boston and launched in 2012 by Jason Robins, Matt Kalish and Paul Liberman, this is the only vertically integrated sports betting operator based in the United States.

About Morgan Stanley Bank

Morgan Stanley is an American multinational investment bank and financial services company based in New York. With offices in over 42 countries and over 60,000 employees, the company’s customers include corporations, governments, institutions and individuals.