Could Online Sports Betting Stocks Get a Bump in 2023?
Wall Street analysts are projecting sizeable gains in U.S. sportsbook share prices in 2023.
S&P 500 is headed for its worst year since 2008. NASDAQ has fallen by around 10%. Major U.S.-based sportsbook operators have seen their share values suffer steep drops over the past 12 months. Legal sports betting in Ohio and Massachusetts in 2023 could give operators a shot in the arm.
FanDuel is the first U.S. sports betting and online casino gaming operator to report a profitable quarter. The other major operators are not expected to go into profit until 2023. FanDue is only one of the four leading operators whose stock price has increased since the start of this year. DraftKings has suffered a 60% drop in share price, while BetMGM's share value has risen from $26.10 to $34.44. Caesars Entertainment's stock has declined 54% for the year to date.
MGM Resorts is forecast to see its share price improve to the $50 range within the next 12 months. The BetM MGM sportsbook arm halved its losses to $23.6 million in Q3 2021. Caesars mobile sportsbooks also reported sharply reduced losses in the third quarter.
DraftKings shares have been punished by the market in the wake of high inflation and recessionary fears. Citi analyst Jason Bazinet believes the shares are oversold and recommends buying them at current levels. DraftKings' Q3 earnings report proved to be a disappointment to Wall Street. The gaming giant failed to improve its profit guidance. It will only attain profitability in Q4 of 2023 and it will not reach the full-year break-even point until the close of 2024.
Caesars Entertainment reported record third-quarter adjusted EBITDA earnings of $1 billion in the third quarter of 2022. Caesar's Digital division's revenue rose 121% year-over-year to $212 million. Its adjusted Q3 Ebitda losses recorded a significant drop to $38 million, versus a loss of a year ago. CNN Business survey of 14 analysts has set a median target of a $67.50 price for Caeres Entertainment stock.
