DraftKings (NASDAQ:DKNG) shares saw more than 3% increase intra-day today after an upgrade by JPMorgan.

The bank upgraded the company from Neutral to Overweight and raised the price target from $26 to $37, suggesting a potential 35% upside from the previous day’s closing price.

The upgrade comes in response to DraftKings’ underperformance since July, with a 13% decline compared to a 6% drop in the S&P 500. The analysts are optimistic about the sports betting industry’s growth potential, both in existing markets and new markets, amid a trend toward better cost control.

The analysts believe DraftKings has a strong competitive position, including a robust product, scale, and brand, that will enable it to compete effectively against new entrants like ESPNBet and Fanatics.

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