jili tutorial

Macquarie Adjusts Price Targets for DraftKings and Flutter Ahead of Q3 Earnings: A Comprehensive Analysis

By jili tutorial · October 11, 2026

Macquarie Adjusts Price Targets for DraftKings and Flutter Ahead of Q3 Earnings: A Comprehensive Analysis

As the online sports betting industry prepares to release its third-quarter earnings, Macquarie analyst Chad Beynon has made notable adjustments to price targets across the sector. While maintaining a generally optimistic outlook, Beynon has trimmed targets for key players like DraftKings and Flutter Entertainment, reflecting both challenges and opportunities in the evolving market.

Key Takeaways for Investors

Revised Price Targets

Macquarie has lowered its price targets for DraftKings (NASDAQ: DKNG) from $38 to $34 and for Flutter Entertainment (NYSE: FLUT), owner of FanDuel, from $150 to $128. Despite these reductions, the new targets still suggest significant upside potential for these stocks, which have faced recent market pressures.

Sector-Wide Performance Expectations

The third-quarter results for online sports betting (OSB) operators are projected to show steady growth, driven by tailwinds from the conclusion of the 2026 FIFA World Cup in July and the early momentum of the NFL season. These factors are expected to offset seasonal weakness typically seen in August.

Drivers of Q3 Performance

Growth in Online Sports Betting (OSB)

Beynon anticipates a 6% increase in OSB gross gaming revenue (GGR) for the third quarter. July’s strong performance, fueled by the FIFA World Cup, and improved September volumes—highlighted by DraftKings’ double-digit growth—are key contributors. However, August handle dipped by 1%, reflecting seasonal slowdowns.

iGaming Growth Outlook

The iGaming sector is expected to grow by 18%, slightly below Flutter’s mid-teens growth projections. This segment continues to show resilience, even as broader economic challenges persist.

The Rise of Prediction Markets

Record-Breaking Volumes

Prediction markets have emerged as a focal point for investors, with September volumes reaching a staggering $19 billion—a 1,035% year-over-year increase. This surge was driven by the start of football season (NFL and college) and momentum from the FIFA World Cup. Notably, prediction markets generated $4.3 billion in taker volume in the first week of September, even before NFL games began, and set a daily record of $802 million on the NFL’s opening Sunday.

Investment in Prediction Platforms

Both DraftKings and Flutter are heavily investing in their prediction market platforms. DraftKings, for instance, has highlighted soaring volumes on its DKeX exchange, underscoring its confidence in the long-term potential of prediction markets. However, the rise of yes/no exchanges, which are increasing customer acquisition incentives, could pose economic challenges for traditional sportsbook operators.

Regional and Las Vegas Casino Operators

Outperformance Amidst Headwinds

Broader gaming equities have faced headwinds in 2023 due to economic pressures, softer VIP volumes in Macau, and reduced visitation on the Las Vegas Strip. Despite this, select regional and Strip operators present favorable setups heading into earnings season.

Top Picks for Investors

Beynon identifies Penn Entertainment (NASDAQ: PENN) and Red Rock Resorts (NASDAQ: RRR) as standout performers among regional casino stocks. On the Las Vegas Strip, Wynn Resorts (NASDAQ: WYNN) remains his top pick, with an “Outperform” rating and a $132 price target.

Conclusion

The third-quarter earnings season promises to be a pivotal moment for the sports betting and gaming industry. While Macquarie’s revised price targets reflect some caution, the firm’s bullish outlook underscores the sector’s long-term potential. Investors should closely monitor developments in prediction markets, iGaming growth, and regional performance as key indicators of future success.