BMO upgrades MediaAlpha to Outperform on auto insurer spending ramp

BMO Capital upgraded MediaAlpha to Outperform from Market Perform with a price target of $28, up from $9. The analyst estimates a “sharp upward inflection” in transaction value related revenue growth across 2024 and 2025 for MediaAlpha. The firm continues to anticipate auto insurers, in particular Progressive, will begin to ramp up “advertising-for-growth spend” beyond sell-side expectations in 2024. BMO sees MediaAlpha’s “beat-and-raises” continuing in the coming quarters and double-digit long-term secular growth prospects within the direct-toc-consumer sandbox where the company operates.