Seaport Research downgraded Roku (ROKU) to Sell from Neutral with a $75 price target. Roku’s advertising growth faces challenges from “streaming behemoths” Disney+ (DIS) and Netflix (NFLX) having launched ad tiers, as well as the broader Media & Entertainment spending pullback and from a softer upfront and scatter market that reacted to last season’s trends, the analyst tells investors. The firm, which is cautious on the growth prospects and reliance on revenue multiples to justify the current stock price, adds that industry digital ad growth expectations for Q4 and 2024 that are above its estimates for Roku imply that the company could be losing share.
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