Gains for Roku will be harder to come by, Citi warned. Analyst Jason Bazinet downgraded the streaming company to neutral from buy, but raised his price target to $100 from $75. Bazinet’s new target suggests the stock could climb more than 9.6% in the next year from where shares finished on Wednesday at $91.25. “While management commentary suggests more modest growth in 2023 (due to a softer ad environment), we see scope for revenues to re-accelerate in 2024,” Bazinet wrote in a Thursday note. “If Roku can revert to historical share gains, we believe Roku’s total revenue can return to ~20% growth. However, given the run-up in the shares, we believe this may be largely priced into the equity.” The stock has gained 125% so far this year after three years of volatility. It is down 1.4% in premarket trading Thursday. Bazinet credited the boom in Roku’s share price this year to three drivers: Short sellers closing their positions Investors pricing in outperformance relative to the company’s guidance, given Roku has beaten its topline outlook during the last four quarters Moderating recession fears, which led investors to increase bets on a soft landing and confidence that Roku can see its revenue growth reaccelerate in 2024 The firm’s latest estimates reflect Roku’s second-quarter performance, Bazinet said. The company reported last month earnings that beat the Street’s expectations, but warned of “muted” television ad spending in the U.S. — CNBC’s Michael Bloom contributed reporting
