Goldman Sachs analyst Stephen Grambling upgraded DraftKings (DKNG) to Buy from Neutral with a price target of $65, up from $45.

The analyst sees ongoing sales beats versus consensus estimates driven by DraftKings' "sustained market-leading" position in new and existing markets, its ability to participate in the economics of single operator states, and the presence of national partnerships that should accelerate growth and achieve scale sooner than the broader peer group.

DraftKings, along with Penn National Gaming (PENN), have the "greatest optionality to drive a network effect," which should bring an upward valuation re-rating, Grambling tells investors in a research note. He recommends buying the market leaders in the "still-emerging" online sports betting industry.