Published on: May 14, 2026, 06:01h.
Updated on: May 14, 2026, 06:01h.
- BNP Paribas has begun covering DraftKings with a “sell” equivalent rating
- Analyst Charlie Muir-Sands highlights threats from prediction markets
- He is the sole sell-side analyst to classify the gaming stock as a “sell”
Despite an analyst starting coverage with a “sell” equivalent, DraftKings (NASDAQ: DKNG) managed a slight increase today.
In a recent assessment of DraftKings, BNP Paribas analyst Charlie Muir-Sands assigned a grade of “underperform”—the bank’s version of “sell”—indicating significant competition from prediction market rivals Kalshi and Polymarket.
Muir-Sands states, “The rapid growth of federally regulated prediction markets is likely to hinder DraftKings’ growth and limit margin expansion.”
While it’s not unprecedented for analysts to issue “sell” ratings on DraftKings, it’s also not common. Currently, among the 33 analysts tracking the stock, 27 have given it ratings of “strong buy” or “buy,” per Seeking Alpha’s data. Muir-Sands stands as the only analyst labeling DraftKings with a “sell” rating.
BNP Paribas Identifies Overlap Issues for DraftKings
BNP Paribas has set a price target of $20 for DraftKings, suggesting a potential decline of over 20% from today’s closing price of $25.15. Muir-Sands cites the risk of market cannibalization due to Kalshi and Polymarket.
A recent survey by the French bank found that over 50% of Kalshi and Polymarket users also place bets on DraftKings, indicating a “significant overlap” that may jeopardize DraftKings’ market share.
Conversely, alternative sell-side surveys suggest that Kalshi is less favored than DraftKings among customers. These studies imply that bettors in states with access to both platforms often prefer the DraftKings sportsbook.
According to Muir-Sands, shifting consumer behavior may favor event-focused contracts in sports betting over traditional sports betting, potentially impacting established operators like DraftKings. However, DraftKings has its own prediction market—DraftKings Predictions—showing promise in enhancing market-making and reducing customer acquisition costs.
Positive Developments for DraftKings
Though the “underperform” rating from BNP Paribas is uncommon and may have surprised some investors, the news surrounding DraftKings isn’t entirely bleak.
In a separate report, Morgan Stanley projected handle growth of 6% and 8% for the second and third quarters, respectively, buoyed by strong performance in April and the upcoming World Cup in June.
Morgan Stanley acknowledged the existence of prediction markets, suggesting that investments in DraftKings Predictions might impact the company’s financials for 2026 while also serving as potential growth catalysts in the long run. The bank currently maintains an “overweight” rating for the stock with a price target of $39, adjusted down from $40.