MoffettNathanson reduced its ratings on DraftKings Inc. (NASDAQ:DKNG) and Flutter Entertainment (NYSE:FLUT), moving both names from Buy to Neutral, and the market responded with modest share price declines on Monday.
DraftKings shares slipped 1.49% following the change, while Flutter retreated 0.80%. Other industry names recorded mixed moves in the same trading session: Penn Entertainment (NASDAQ:PENN) fell 1.16%, while Super Group (NYSE:SGHC) ticked up 0.40%.
The analyst team at MoffettNathanson explained their decision and acknowledged the timing of the adjustment. In their comment, the analysts said:
"We admit that we are very late to downgrading DKNG and FLUT at this point. The stocks have sold off from the highs of last year and taken another material step down so far this year. But in the end, our core belief that the valuation of both companies is so attractive - even on conservative longer-term forecasts - is no longer enough to maintain our Buy recommendations,"closing the justification they provided for the shift to Neutral.
The firm noted the downgrades arrive after both stocks had already posted substantial retreats from their 2024 peaks, with additional declines occurring in early 2025. MoffettNathanson highlighted that the stocks had largely moved materially lower before the ratings were adjusted, and that reality influenced their decision.
The moves mark a reassessment of the two firms by the analyst house, even as it retained a view that valuations remained appealing on a long-term, conservative basis. The practical outcome of the reassessment was nonetheless a downgrade to Neutral, reflecting that the analysts no longer considered Buy endorsements justified under current conditions.
Market participants watching the gambling sector may interpret this sequence of events as a calibration of analyst conviction after recent share-price erosion, while individual names continue to report varied intraday performance.