Roku, Inc. (NASDAQ: ROKU) shares rose by 7% Monday morning after KeyBanc Capital Markets raised its price target for the streaming service provider.
Keybanc analyst Evan Wingren raised Roku’s stock price target from USD 63 per share to USD 76 per share, reiterating his overweight rating. Wingren holds a bullish position saying that Roku users are increasingly using the platform to purchase extra content. Wingren further continues and highlights that the continued user engagement is a “bullish sign for the sign value of the platform.”
Last week, Apple (NASDAQ: AAPL) unveiled its new Apple streaming service during a keynote event. AppleTV+ allows paying subscribers to watch media content from various streams such as HBO, SHOWTIME, and Starz. Apple’s announcement sent streaming service provider’s stocks higher after its announcement.
Apple’s new TV streaming service will compete directly with major providers such as Netflix (NASDAQ: NFLX) and Disney (NYSE: DIS). However, Wingren says he isn’t concerned about Apple. He further notes that Apple’s delayed entry into the streaming market in combination with its focus on repackaging existing content will make it difficult for Apple to compete.
Apple’s “competitive impact likely [is] minimal. Apple’s video strategy highlighted a relatively light original content offering and repackaging of existing content,” he wrote.
Wingren also highlights Roku’s partnership with Adobe (NASDAQ: ADBE), which he believes that it will bolster Roku’s position in the over-the-top advertising sector.
“We recommend owning ROKU. We see it as a unique platform play on the growth in long-form, streaming video, with a strong competitive position and improving fundamentals,” he wrote.
Roku’s shares have now surged by 124.48% since year-to-date.