Roku gets analyst upgrade, upbeat words from Liberty’s John Malone

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Pivotal Research Group analyst Jeff Wlodarczak ended his bearish call on Roku Inc.’s stock midday Thursday, raising his rating to neutral from sell. The upgrade was “driven mainly by the favorable recent commentary regarding Roku’s long-term competitive positioning by John Malone,” as well as ongoing benefits from the COVID-19 crisis, which has accelerated the shift to streaming and delayed some competitive threats, Wlodarczak wrote. He referred to comments by Liberty Media Corp. Chairman John Malone on CNBC that discussed how Roku was set up well to have a “long-term profitable global business.” Wlodarczak sees a “high likelihood” that pandemic-related lockdowns return in the winter, which could deliver a boost to Roku’s subscriber numbers, though the company also looks positioned to benefit more generally from the decline of linear television, in his view. He expects that Roku will strike a distribution deal with HBO Max and argued that “the currently mediocre Roku channel has the potential to be significantly strengthened with signing of new distribution deals.” He raised his price target to $240 from $75. Roku shares shot up 10% in Thursday’s session. It’s gained 90% so far this year as the S&P 500 has increased 11%.
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