11:11 AM EST, 11/04/2025 (MT Newswires) -- DraftKings ( DKNG ) faces "relentless" headwinds tied to sports outcome volatility, lower hold rates, underperformance in iGaming, and persistent state tax pressures, raising concerns about its long-term earnings power, BofA Securities said in a Tuesday research report.

The company's iGaming share has fallen to about 23% from 27% over the past two years, and recent state data continues to "materially" lag peers, according to the note.

Next year could again bring state-level tax headwinds, which have already weighed on margins by roughly 200 basis points, the brokerage said.

The near-term narrative around prediction markets also remains challenging, with potential for tighter margins amid rising marketing intensity and regulatory constraints.

BofA lowered its 2025 EPS guidance to minus $0.09 from $0.34. For 2026 and 2027, it lowered its EPS guidance to $0.44 and $1.37, respectively, from $0.87 and $1.87.

The brokerage downgraded DraftKings ( DKNG ) to neutral from buy and cut its price objective to $35 from $48.

Shares of DraftKings ( DKNG ) were down 3.8% in recent trading.

Price: 29.40, Change: -1.17, Percent Change: -3.83