© Reuters. Trade Desk (TTD): Morgan Stanley promotes ‘best-in-class’ Ad Tech stock
Morgan Stanley analysts upgraded shares of The Trade Desk (NASDAQ:) to Overweight from Equal Weight.
Analysts also raised their price target by 50% to $90 a share on “best-in-class” Ad Tech stock. Shares of the digital content business rose more than 5.5% on Friday.
“We see growth in ad-supported broadcast and retail media as two of the strongest growth areas in online advertising and we see the US CTV market growing approximately 18%” 22-25 “while we expect retail media (formerly global in China) to grow at a compound annual growth rate As the leading demand-side independent platform (DSP), it is well positioned to benefit from both directions, the analysts said in a note to clients.
One of the main competitive advantages of the trade desk is the “close relationship” between the company and the advertising agencies.
They added, “We believe TTD will (be) able to leverage its position as an independent player to sign on to more retail media partners … and eventually be a leader in off-site retail media advertising.”
The upgrade call was made despite the fact that TTD shares have outperformed by ~11% over the past 6 months.
“We believe that as ad markets stabilize, there could be more upside as TTD re-accelerates growth. Given TTD’s competitive position as the leading independent DSP, as well as its low variable costs (<20% of revenue) and B2B business model, we We look to SaaS as a key group of companies (although we are well aware of TTD's relative lack of contract/recurring revenue streams," the analysts concluded.
Shares of the trading desk are up 63.4% year-to-date through Thursday’s close.
