DraftKings (DKNG) is well-positioned to face the uncertainty related to the regulatory future of prediction markets, BofA Securities said in a Monday research note.

Predication markets have grown slower than sportsbooks since the start of the football season, reducing core cannibalization concerns, analysts wrote.

The brokerage said it now expects 2026 EBITDA of $500 million from $625 million earlier, as higher prediction-markets investments partially offset robust core trends.

BofA sees a favorable setup for the company into 2027, but would require enhanced cost discipline within the core business to support higher incremental margins in 2028 and beyond, according to the note.

The brokerage said it upgraded the stock to buy from neutral and maintained its price target of $27 per share.

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