DraftKings Among J.P. Morgan’s Top Ideas for 2026
Posted on: December 31, 2025, 01:19h.
Last updated on: December 31, 2025, 01:19h.
- The sports betting stock had a rough 2025.
- DraftKings is the only gaming name on the bank’s list of nearly 60 equity ideas for 2026.
DraftKings (NASDAQ: DKNG) stock endured a forgettable 2025, slumping 6.53% while the S&P 500 gained nearly 17%, but some market observers believe the new year will bring better things for shares of the sportsbook operator.
DraftKings is one of 57 stocks on J.P. Morgan’s top ideas list for 2026 and one of several from the consumer discretionary sector, but it’s the only gaming name in the group. The bank rates DraftKings “overweight” with a price target of $42, implying upside of more than 20% from where the stock currently resides.
J.P. Morgan highlighted several traits possessed by companies on its 2026 top ideas list, including strong balance sheets and management teams with strong records of capital allocation and benefiting from industry consolidation.
DraftKings’ balance sheet is solid and the company has previously used bolt-on acquisitions to bolster its technology stack and enter new industries, such as internet lottery and prediction markets. Speaking of prediction markets, the operator recently launched DraftKings Predictions and that will test management’s operational acumen in 2026.
DraftKings Stock Could Benefit from ‘K-Shaped Economy’
In 2026, DraftKings could benefit from a “k-shaped economy” — the scenario in which different parts of the economy recover at varying rates following periods of malaise.
What exactly this means depends on how the aggregate macroeconomic data is broken out to suggest the K-shaped profile,” according to Investopedia. “It can mean that some industries quickly return to strong growth in output while others see declining activity, or that some types of asset values rise while others continue to fall, or that some segments of society see increasing wealth and income while others lose wealth and income. It might also mean other possibilities.”
Specific to DraftKings, a K-shaped recovery could benefit the gaming company if income levels and wealth effects increase among affluent bettors.
Likewise, the company could benefit from a potential resurgence among middle-income clients as tax breaks in President Trump’s One Big Beautiful Bill Act (OBBBA) take shape. Next year will be the first in which perks such as no taxes on overtime and tips are in effect.
DraftKings Spending Plans in Focus
J.P. Morgan notes investors should be mindful of companies’ capital return plans in 2026, pointing out that dividends and share repurchase programs could be drivers of share price performances. Regarding DraftKings, it’s unlikely the gaming company becomes a dividend payer next year, but in November it doubled the size of its buyback program to $2 billion from $1 billion.
Companies aren’t legally obligated to buy back stock simply because they make related announcements and while DraftKings has nibbled at its shares since its first repurchase plan was unveiled, analysts and investors will be monitoring how prediction markets expenditures affect the operator’s shareholder rewards plans in 2026.
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