Roku’s HBO Max deal: how the action can climb even higher

Benchmark analyst Daniel Kurnos wrote in a note Thursday that a deal needs to be done, but he still sees a huge advantage for Roku stock. He raised his price target from $ 300 to $ 410. It now has the highest target listed by FactSet.
“The two recent deals are more meaningful than the mere inventory they provide, as part of Bear’s earlier thesis focused on Roku’s trading weight loss over time,” Kurnos wrote.

Kurnos notes that a lot of good news appears to be included in the share price, but he still expects consensus expectations to rise significantly for the company’s fourth quarter. It emphasizes the power of advertising through improved cost per mile or CPM. CPM is a marketing term used to refer to the price of 1,000 ad impressions on a single web page.

It expects the platform’s revenue to reach $ 431.7 million in the fourth quarter, a figure of $ 20 million more than its previous forecast. He thinks it could still prove to be conservative.

“We are now also ahead of the consensus for 2021 on all parameters, effectively reflecting the transfer impact and a slightly more bullish baseline for underlying prices, although the market is trending a bit towards higher levels. standardized, ”he wrote.

Citi Research analyst Jason Bazinet, who has a price target of $ 375 on the stock, wrote in a note Thursday that, in the end, the economics of the deal are less important to Roku than to make one.

“Roku will have ample time to revise future agreements with content owners who value Roku’s large CTV platform quite well,” Bazinet wrote. “Right now, creating a truly global platform – with a wide range of content – is much more important, in our opinion.”

Roku’s stock rose 1.1% to $ 329.48 on Thursday. the

Indice S&P 500

increased 0.6%.

Write to Connor Smith à [email protected]