Stifel: Online Gambling Growth Slows, Buy Ratings Kept

Stifel Report Highlights Sector Slowdown

Stifel's April U.S. online gambling tracker signals a deceleration in the sector's growth. The report highlights that U.S. sports betting handle growth turned negative, largely due to challenging year-over-year comparisons, although New York's handle showed recent improvement.

Market Overview and Key Players

The report noted that while iCasino gross gaming revenue growth has cooled from previous highs, it remains healthy and aligns with company guidance. In terms of market share, FanDuel's handle loss improved in March, a trend Stifel connects to promotional activities. Meanwhile, prediction market platform Kalshi saw volumes that continued to exceed regulated online sports betting.

Analyst Ratings and Stock Impact

Despite the observed slowdown, Stifel reaffirmed its positive stance on key industry players. The firm maintained Buy ratings on Sportradar (NYSE:SRAD) with a $13.43 price target, Flutter (NYSE:FLUT) with a $103.33 price target, and DraftKings (NASDAQ:DKNG) with a $24.17 price target. This confidence is partly based on a tangible path to prediction market expansion.

Outlook Summary

Looking ahead, the report suggests more rational promotional spending from tier-2 operators, although rising user acquisition costs are a factor. Stifel also believes that risks related to unregulated revenue for Sportradar are overstated, suggesting a stable outlook for the company despite recent short reports.

FAQ

Q: What did Stifel's report say about U.S. sports betting growth?
A: It reported that U.S. sports betting handle growth turned negative in April, primarily due to difficult year-over-year comparisons.

Q: Which stocks did Stifel maintain Buy ratings on?
A: Stifel maintained Buy ratings for Sportradar (SRAD), Flutter (FLUT), and DraftKings (DKNG).

Source: Investing.com