🔴 Exclusive webinar: The Secrets of ProPicks AI Success Revealed + November’s List FREEWatch Now

Wells Fargo starts TTD stock at Buy; Citi expects 'strong beat and raise' Q3 print

Published 10/29/2024, 08:46 AM
© Reuters
GOOGL
-
AMZN
-
NFLX
-
GOOG
-
TTD
-
ROKU
-

Investing.com -- Wells Fargo on Monday started research coverage of The Trade Desk (NASDAQ:TTD) stock with a Buy rating and a price target of $150 ahead of the company’s Q3 earnings report next month.

In a note to clients, the investment bank outlined several factors contributing to the positive outlook, including Amazon (NASDAQ:AMZN)'s increased shift of advertising spend to Connected TV (CTV) and new partnerships that are expected to ramp up, as well as regulatory distractions faced by its rival Alphabet Inc Class A (NASDAQ:GOOGL).

More specifically, analysts believe that the introduction of advertisements on Amazon Prime Video has accelerated the growth of the CTV industry, which is advantageous for The Trade Desk, despite initial concerns from the buy-side about potential market share capture.

They note that industry checks indicate that publishers have responded to Amazon's move by increasing ad load by approximately 20% and reducing Cost Per Mille (CPMs).

“Increased scale of inventory + better pricing have accelerated shift from linear to CTV, more than offsetting any competitive impact to TTD,” analysts noted.

Looking ahead, Wells Fargo forecasts a significant benefit for The Trade Desk from unlocking inventory on Roku (NASDAQ:ROKU) and Netflix (NASDAQ:NFLX) in 2025 and 2026. The firm's revenue estimates are 6% and 8% ahead of the consensus for those years, respectively. 

The anticipated integration with Netflix and Roku is expected to contribute approximately 400 basis points to The Trade Desk's gross spend growth in 2025, positioning the company's revenues ahead of consensus.

The firm also notes that The Trade Desk is likely to continue gaining market share from Google's DV360 in the medium term due to Alphabet's legal challenges.

“In our view, the biggest benefit from ad-tech legal challenges at Alphabet/Google is likely to be underinvestment & lack of focus, rather than pot'l business model or industry structure changes,” analysts continued.

Separately, Citi analysts said they expect “another strong beat and raise quarter” from TTD, noting that key growth drivers including CTV, Retail Media, and market share gains remain intact. Moreover, there is “additional upside potential from political spend."

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.