On Wednesday, Morgan Stanley maintained its Overweight rating and $49.00 price target for DraftKings Inc. (NASDAQ:DKNG). The firm highlighted the upcoming executive transition with current Chief Financial Officer (CFO) Jason Park set to assume the role of "Chief Transformation Officer" starting May 1, 2024. Alan Ellingson, currently the Senior Vice President of Finance and Analytics at DraftKings, will be promoted to CFO.
The change in executive roles is expected to enhance the company's focus on deploying new technologies and achieving additional operating efficiencies. Jason Park's new position will also involve overseeing the integration of the recently acquired Jackpocket Inc. Morgan Stanley anticipates a smooth transition and foresees potential catalysts for DraftKings' stock related to capital allocation and balance sheet optimization.
DraftKings' strategic moves come at a time when other large tech firms have made significant capital allocation decisions that were well-received by the market. Companies such as Meta Platforms Inc. (NASDAQ:META), Uber Technologies Inc . (NYSE:NYSE:UBER), and T-Mobile US Inc. (NASDAQ:TMUS) have announced buybacks or dividends. Morgan Stanley expects DraftKings to provide more details on its capital allocation strategies in the second half of 2024.
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