Market Overview

Roku Gets An Upgrade To Buy, DA Davidson Says US-China Truce Bodes Well For The Company

Share:
Roku Gets An Upgrade To Buy, DA Davidson Says US-China Truce Bodes Well For The Company
Related ROKU
Citi Slashes Roku Price Target, Names 5 Reasons For Staying Neutral
10 Biggest Price Target Changes For Monday
Roku jumps after Walmart backs out of streaming plans (Seeking Alpha)

U.S. President Donald Trump and his Chinese counterpart President Xi Jinping over the weekend agreed to a 90-day truce period. The latest development bodes well for streaming video company Roku Inc (NASDAQ: ROKU), according to DA Davidson.

The Analyst

DA Davidson's Tom Forte upgraded Roku from Neutral to Buy with an unchanged $49 price target.

The Thesis

The trade war between the U.S. and China will be put on hold for a 90-day period, which alleviates a near-term risk to Roku's stock. Specifically, Forte says it's likely all of Roku's products are manufactured in China and now won't be subject to harsh tariffs. The truce period lasts 90 days, so Roku's concerns of higher tariffs isn't fully eliminated at this time.

Roku's stock has fallen close to 50 percent from its 52-week high of $77.57, which Forte says now prices in external risks from competitors, including Amazon.com, Inc. (NASDAQ: AMZN).

Roku has three potential catalysts over the next 12 months that could support the stock, including:

  • The continued shift of over-the-top viewership of video content.
  • Better than expected growth in higher margin platform sales.
  • The inclusion of new streaming content, such as ESPN+.

Price Action

Shares of Roku were trading higher by 5.5 percent to $43 early Monday morning.

Related Links:

What To Do With Roku's Stock Following 20% Sell-Off?

Wedbush: Buy The Dip In Roku

Photo courtesy of Roku.

Latest Ratings for ROKU

DateFirmActionFromTo
Jan 2019CitigroupMaintainsNeutralNeutral
Dec 2018KeyBancMaintainsOverweightOverweight
Dec 2018SunTrust Robinson HumphreyInitiates Coverage OnHold

View More Analyst Ratings for ROKU
View the Latest Analyst Ratings

Posted-In: China DA Davidson Donald Trump ESPN+Analyst Color Upgrades Top Stories Analyst Ratings Best of Benzinga

 

Related Articles (AMZN + ROKU)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MDRXKeyBancUpgrades0.0
ANETNomuraUpgrades260.0
CNPRBC CapitalUpgrades34.0
FISVOppenheimerUpgrades88.0
FNDUBSUpgrades37.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

This Day In Market History: Bush, Gorbachev Suggest An End To The Cold War

Best Sector ETFs For December: Repeat Performers