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DraftKings prediction market costs prompt Stifel to lower earnings expectations

Stifel lowered its 2026 adjusted EBITDA forecast for DraftKings by 100 million dollars to reflect additional prediction market spending, putting its estimate 16 percent below the low end of the company's previous guidance, and cut its DraftKings price target to 32 dollars from 36 dollars. The firm kept Flutter, the FanDuel parent, as its top stock pick while lowering its price target to 125 dollars from 133 dollars.

Stifel reduced its forecast for DraftKings’ 2026 adjusted EBITDA by 100 million dollars to account for additional spending on prediction markets, according to Legal Sports Report.

The revised estimate is 16 percent below the low end of DraftKings’ previous guidance. That gap puts the anticipated cost of its prediction market efforts at the center of Stifel’s reassessment.

Lower targets for DraftKings and Flutter

Stifel also lowered its DraftKings price target to 32 dollars from 36 dollars, according to Legal Sports Report.

The firm retained Flutter, FanDuel’s parent company, as its top stock pick while cutting its price target to 125 dollars from 133 dollars. The summary provided does not identify a reason for the Flutter target reduction.

What it means for prediction markets

  • Stifel’s DraftKings revision shows that prediction market spending is affecting analysts’ near-term earnings expectations, not just their assessment of potential growth.
  • The 16 percent gap is between Stifel’s estimate and the low end of DraftKings’ previous guidance; it is not a reported change to company guidance.
  • The information provided quantifies an earnings forecast reduction, but does not specify the additional spending’s timing or allocation. It therefore offers limited insight into the scope of DraftKings’ prediction market plans.
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    Legal Sports Report
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