Wells Fargo upgrades Criteo to Overweight, raises price target to $41

As previously reported, Wells Fargo analyst Brian Fitzgerald upgraded Criteo to Overweight from Equal Weight with a price target of $41, up from $28, given strong Q4 2023 and 2024 guide. Outlook for stable margin amid 3PC signal loss increases the firm’s conviction in mid-to-long-term margin expansion potential. Wells now expects Criteo can reach mid-30s EBITDA margin by the end of our 10-year DCF. The firm also finds commerce audiences cross-sell “encouraging” ahead of retargeting headwinds. Further, Wells says it believes testing/implementation of Chrome’s Privacy Sandbox represents a significant tech hurdle for the ad tech industry that is likely to play to the strengths of the largest and most sophisticated players, and that the largest independent players such as Criteo are likely to be key share gain beneficiaries through this transition.