Analysts Remain Positive on Leading Gaming Companies Amid Emerging Industry Challenges
Confidence in Major Gaming Operators Remains Strong
Wall Street experts continue to hold a largely optimistic view of prominent, established gaming companies. Even with anticipated sector volatility in 2026, industry leaders like DraftKings and Flutter are seen as resilient enough to manage unexpected disruptions, provided they keep innovating and adapting.
Adapting to Short-Term Industry Obstacles
Truist Securities recently reaffirmed its Buy ratings for DraftKings and Flutter, acknowledging immediate pressures such as the rise of prediction markets and increasing state taxes. Despite these hurdles, the analysts believe that renowned operators possess the strength and agility to navigate these challenges effectively. Barry Jonas, a Truist analyst, highlighted that investor caution might be excessive given the circumstances.
Jonas observed positive signs toward the end of 2025 regarding betting hold improvement and suggested that initial forecasts for early 2026 might be conservative, potentially paving the way for positive surprises. Although the pace of new legalization has slowed, states like Maine offer promising near-term opportunities.
While higher taxes present some concern, their overall impact is expected to be limited. On the other hand, prediction markets pose a more immediate challenge, especially with ongoing legal disputes affecting certain platforms. Nevertheless, companies like DraftKings and Flutter have the necessary resources and market dominance to adjust to various conditions.
Robust Growth Prospects in the US Gaming Market
Projections from Truist foresee the US interactive gaming market expanding to an estimated $33.1 billion by 2026, with the possibility of doubling by 2030. DraftKings continues to hold a favorable price target of $45, anticipating an adjusted EBITDA of $940 million for 2026. Additionally, state-level insights show that DraftKings has been gaining ground against competitors such as FanDuel, strengthening investor confidence.
Flutter also retains positive analyst support despite some tax-related challenges in regions including the UK, Brazil, and India. While Truist adjusted its price target down to $260, it maintained its Buy rating. Texas Capital Securities expressed even greater optimism with a $294 price target, emphasizing Flutter’s solid fundamentals, diverse global presence, and significant operational scale.
Beyond these key players, other analysts remain upbeat about the sector. Jordan Bender from Citizens recently noted that gaming valuations may be undervalued due to exaggerated concerns over regulatory constraints that may never fully develop. He believes that established companies’ scale, discipline, and diversified income streams position them well for sustainable long-term growth.
