DraftKings Among J.P. Morgan’s Top Ideas for 2026

DraftKings Among J.P. Morgan’s Top Ideas for 2026

Although the stock of DraftKings (NASDAQ: DKNG) had a forgettable 2025, falling 6.53% as the S&P 500 gained almost 17%, some market watchers think that the sportsbook operator's shares will do better in the coming year.

DraftKings is the only gaming company among the 57 stocks on J.P. Morgan's list of the greatest ideas for 2026, including five from the consumer discretionary category. With a price objective of $42, the bank classifies DraftKings as "overweight," suggesting an increase of more than 20% from the stock's current position.

On its 2026 top ideas list, J.P. Morgan emphasized a number of characteristics that businesses should have, such as robust balance sheets and management teams that have a great track record of allocating capital and profiting from industry mergers.

In addition to having a strong balance sheet, DraftKings has made advantage of bolt-on acquisitions in the past to expand into other markets including online lotteries and prediction markets. Speaking of prediction markets, in 2026 the operator will put management's operational savvy to the test with the debut of DraftKings Predictions.

A "K-Shaped Economy" Could Help DraftKings Stock

DraftKings might profit from a "k-shaped economy" in 2026, which is a situation when various sectors of the economy recover at different rates after downturns.

"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.”

A K-shaped rebound could be advantageous for DraftKings specifically if wealthy bettors' income levels and wealth impacts rise.

Similarly, when tax incentives in President Trump's One Big Beautiful Bill Act (OBBBA) take shape, the business may see a rebound in middle-class customers. Benefits like no overtime or tip taxes will be implemented for the first time next year.

Focus on DraftKings' Spending Plans

Investors should pay attention to companies' capital return plans in 2026, according to J.P. Morgan, which also points out that share repurchase and dividend policies may influence share price movements. It's unclear that DraftKings will pay dividends in the upcoming year, but in November, the gaming business raised the size of its buyback program from $1 billion to $2 billion.

Analysts and investors will be keeping an eye on how prediction market expenditures impact the operator's shareholder rewards plans in 2026, even though DraftKings has nibbled at its shares since its first repurchase plan was announced. Companies are not legally required to buy back stock just because they make related announcements.