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On Wednesday, Jefferies analyst James Heaney revised the price target for The Trade Desk (NASDAQ:TTD) shares, lowering it to $75 from the previous $120, while maintaining a Buy rating on the stock. Currently trading at $57.1, InvestingPro analysis suggests the stock is undervalued, with strong financial health indicators including a solid balance sheet with more cash than debt. The adjustment follows a discussion with Joel Cox, co-founder of CTV-focused ad agency Strategus, which provided several insights into the current advertising market dynamics and The Trade Desk’s position within it.
According to Heaney’s commentary, the conversation with Cox revealed that, despite increasing economic headwinds, there has not been a noticeable slowdown in advertising spending. The Trade Desk continues to demonstrate strong performance with 25.63% revenue growth and an impressive 80.69% gross profit margin. However, The Trade Desk is experiencing heightened competition, especially from Amazon (NASDAQ:AMZN), which is emerging as a formidable contender in the advertising space.
Furthermore, the discussion highlighted the potential for Netflix (NASDAQ:NFLX) to become a significant force in connected TV (CTV) advertising. This is expected as live events continue to prompt a shift in advertising budgets away from traditional linear television and towards streaming platforms.
Despite the challenges identified, including more intense competition and the evolving CTV landscape, the expert’s outlook for The Trade Desk remains positive, particularly regarding the anticipated rollout of UID 2.0, a new user identity framework for online advertising. Heaney echoed this sentiment, choosing to uphold the Buy rating for The Trade Desk shares.
The revised price target of $75 reflects a more conservative estimate, taking into account the expert’s slightly negative view on The Trade Desk’s near-term prospects. Nonetheless, the long-term bullish stance on the company’s growth potential and market position remains unchanged. InvestingPro subscribers have access to 17 additional exclusive tips and comprehensive analysis for TTD, including detailed valuation metrics and growth forecasts. Get the full picture with the Pro Research Report, part of our coverage of 1,400+ top US stocks.
In other recent news, The Trade Desk has been the subject of various analyst updates and evaluations. BofA Securities maintained a Buy rating with a $130 price target, expressing confidence in The Trade Desk’s ability to compete effectively against Amazon’s growing presence in the digital advertising space. CFRA upgraded The Trade Desk’s rating from Hold to Buy, setting a price target of $97, citing the company’s enticing valuation and healthy growth rates despite recent market challenges. Citi also maintained a Buy rating with a steady price target of $70, noting The Trade Desk’s strong position in the connected TV market and its solid relationships with advertising agencies.
RBC Capital Markets lowered its price target to $100 from $120 while maintaining an Outperform rating, following insights from a non-deal roadshow with the company’s management. Despite recent challenges, RBC expressed confidence in The Trade Desk’s long-term growth strategy. Truist Securities reiterated a Buy rating with a $130 price target, emphasizing that concerns over the company’s Kokai platform rollout and competition from Amazon are temporary. Analysts at Truist believe The Trade Desk’s strong return on ad spend and cross-channel capabilities will support its continued success. These developments reflect a range of perspectives on The Trade Desk’s market position and future prospects.
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