Susquehanna upgrades Roku to Positive on attractive risk/reward

Susquehanna upgraded Roku to Positive from Neutral with a $75 price target. Despite "near-term noise," the long-term connected TV opportunity remains intact and Roku will be a "prime beneficiary of the secular shift of linear budgets," the analyst tells investors in a research note. The firm believes the scatter market likely bottomed in late Q4, with improvement building through Q1. Beyond scatter, Susquehanna’s checks indicate that the broader connected TV market is "generally healthy and should see a tailwind from the upfronts." It believes Roku is beta testing opportunities to bring more third-party digital service provider buying to its demand-constrained platform, and views this as a "potential source of incremental high margin revenue." The firm sees an attractive risk/reward at current valuation levels.