Morgan Stanley downgrades Penn National and DraftKings after big runs for both stocks

The entrance from the elevators, designed to resemble a tunnel entering a stadium, is pictured at the new DraftKings office in Boston on March 25, 2019.
David L. Ryan | The Boston Globe via Getty Images

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It's time for investors to cash in some of their chips on two gambling stocks, according to Morgan Stanley.

The firm downgraded DraftKings and Penn National Gaming to equal weight from overweight after a strong run for both stocks, saying in a note that the hot streak has run its course.

"DKNG and PENN have both more than doubled since the start of the year. While we think a lot of the increased value is valid, we are concerned investors' expectations are too high and see 6 potential negative catalysts through" the end of the year, the note said.