Why DraftKings Shares Are Ripping Higher Today

DraftKings Inc DKNG is trading higher Wednesday following positive analyst coverage from Morgan Stanley.

Morgan Stanley analyst Thomas Allen upgraded DraftKings from an Equal-Weight rating to an Overweight rating and announced a $31 price target.

Allen thinks that investors should not ignore DraftKings' leading position in what he thinks will be a very large and profitable U.S. sports betting and internet gaming market.

The Morgan Stanley analyst noted that initial data from New York's first days of legal sports betting reaffirms how big the sports betting opportunity is. Allen now sees an implied market revenue run rate well ahead of the firm's previous expectations. Therefore, the stock's recent pullback presents an opportunity to invest with a long-term outlook, according to the analyst.

DraftKings is a digital sports entertainment and gaming company that provides users with daily fantasy sports contests, sports betting and iGaming opportunities.

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DKNG Price Action: DraftKings has traded as low as $17.41 and as high as $74.38 over a 52-week period.

The stock was up 13.7% at $21.99 at time of publication.

Photo: World Poker Tour from Flickr.