DraftKings (DKNG) stock forecast
“We estimate that the value of a DraftKings subscription will rise from $1,750 in 2021 to $4,900 in 2024.” The increase in the EV per sub is due to “higher [average revenue per user], higher gross profit margins, and lower [customer acquisition costs,” according to the note.
Citi predicts that DraftKings will have slightly less than 3 million daily users by 2023. The firm set a price target of $66 per share, which is 37.7 percent higher than the stock’s closing price on Friday.
DraftKings and its competitors were hot stocks in 2020 as several states moved toward legalizing sports betting, but the industry has cooled this year. DraftKings shares are up just 2.9 percent year to date.
In addition to DraftKings, Citi initiates the acquisitions of software companies GeniusSports and Sportradar. The industry is expected to grow steadily in the first half of this decade, according to the firm.
“We expect the global [online sports betting] market to grow at a 17 percent annual rate from 2019 to 2025, driven by faster growth in the US (due to regulatory tailwinds),” according to the note. “From 2019 to 2025, we expect the iGaming market to grow at a similar rate of 16 percent per year.”
Starbucks (SBUX) stock forecast
Analyst Brian Mullan raised the coffee chain from neutral to buy in a note to clients on Monday, saying the stock was nearing a bottom after a rough few weeks.
“While there are certainly reasons to ‘fret’ here with SBUX, and we are concerned about a couple of things ourselves,” Mullan wrote, “we have what we believe to be a reasonable degree of confidence that one can start to ‘leg in’ here and eventually be rewarded for taking the risk.”
Netflix shares have fallen 6.8 percent in the last month, putting Deutsche Bank’s price target of $127 per share 14 percent higher than where the stock closed Friday.
While this is not the significant upside seen for some other stocks with buy ratings on Wall Street, the firm believes this is the best time to buy Starbucks.
“At current levels, we note that SBUX is trading at less than 26 times earnings on our 2023 estimates, which are only marginally higher than consensus.” While we are not immune to the desire to ‘wait for a better entry,’ and our sense is that many in the investment community are as well, we are not convinced (enough) that one is on the way,” the analyst said.
Starbucks’ fiscal fourth-quarter results will be released on October 28. Despite the stock’s upgrade, Deutsche Bank reduced its estimates for Starbucks sales in China.
Netflix (NFLX) stock forecast
Analyst Douglas Mitchelson raised his price target on the stock to $740 per share from $643 in a note to clients on Monday, saying that the show has created justified excitement about the stock.
“There is no need for superlatives when it comes to Netflix’s mega-hit Squid Game – its undeniable success has raised investor [third and fourth quarter] subscriber expectations accordingly.” “Our recent discussions with investors suggest an expectation of [4 million to 8 million] net adds for the 3QA/4Q guide, but only because [management] is widely expected to be overly conservative,” Mitchelson said.
Netflix’s stock has outperformed the broader market and its fellow Big Tech companies in recent weeks, with shares up 11% since the end of August.
According to Credit Suisse’s new price target, another 17 percent gain is possible.
“While we acknowledge the set-up into earnings is heady, a 3Q miss appears off the table,” the analyst said. “The 4Q slate is terrific, and [management] commentary is likely to be quite optimistic, with Squid Game the latest evidence proving out its international content strategy.”
Netflix is expected to release its third-quarter earnings after the market closes on October 19.
US economic growth outlook
The firm reduced its 2022 GDP annual growth forecast to 4% from 4.4 percent, and reduced its 2021 forecast to 5.6 percent from 5.7 percent.
Goldman cited the expiration of congressional fiscal support as well as a slower-than-expected recovery in consumer spending.
The company stated that if Covid cases remain elevated from the delta variant, consumers’ spending on services will take longer to recover than the company anticipated.
“For activities such as going to the movies,” the note said, “many people do not expect to resume normal spending patterns for at least another 6 months, implying that a full normalization in economic activity may take some time.”
According to the firm, some service spending may never fully recover because remote work and other pandemic trends continue in some form.
To be sure, even after Friday’s much-weaker-than-expected payrolls report, Goldman said it was not changing its unemployment forecast. The company also stated that it was raising its growth forecast for 2023 and 2024.